Public Storage prices $325 million issue of 6.5% preferreds; Ally remains busy, gets stronger

By Stephanie N. Rotondo

Portland, Ore., April 5 - The preferred stock market "had a very good tone" during Tuesday trading, according to a market source.

"Most bank names, U.S. and domestic, grinded higher on decent volume," the source said.

The firm tone might have also had something to do with a new issue that was expected to price Tuesday from Public Storage. After the bell, terms on the $325 million issue - more than double what the market had been expecting - came out. During regular business, the company's other preferreds were trading somewhat actively and mostly better.

Away from the new issue, the market continued to focus on Ally Financial Inc.'s preferreds. One trader opined that the 8.5% series B preferreds could be ready to fly, given how far the 8.125% series A preferreds have come since being sold in early February.

Public Storage deal prices

Public Storage's new issue priced at the low end of price talk after Tuesday's session closed.

The Glendale, Calif.-based storage company said in a regulatory filing that it issued 13 million shares, or $325 million, of 6.5% series Q perpetual cumulative preferred shares.

The market was expecting a $150 million issue, or 6 million shares, priced between 6.5% and 6.625%.

The preferreds were sold at par of $25. The deal has a $48.75 million greenshoe.

Proceeds from the sale will be used to redeem the company's 7.25% series I cumulative preferred shares at par of $25 plus accrued dividends.

Before the deal priced, Public Storage's other preferred issues were trading mostly higher, according to a market source.

The series M and P preferreds were stronger at $25.18 bid, $25.25 offered and $25.22 bid, $25.23 offered, respectively.

The series K preferred shares, however, traded down to $25.23 bid, $25.29 offered.

Ally 'perched' for gains

Ally Financial's 8.5% series B preferreds were "by far the most heavily traded issue today as the last remnants of 'flipper' stock gets gobbled up," a trader said.

"[The series B preferred stock] seems perched for a move higher, especially when you consider the move that [the 8.125% series A preferreds] have made," he added.

He placed the Bs at $25.06 and the As at $25.92.

Another trader echoed those levels, calling the Bs up 4 cents and the As up 2 cents.

Meanwhile, Ally's former parent, General Motors Co., saw its 7.375% preferreds jump 27 cents to $7.45.

GM's common stock meantime traded up 48 cents, or 1.48%, to $32.87 (NYSE: GM).

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