Public Storage prices $450 million 5.2% cumulative preferreds; Allstate active, firms

By Stephanie N. Rotondo

Phoenix, Jan. 7 - New issues were starting to line up in the preferred stock market on Monday.

Public Storage announced a sale of series W cumulative redeemable perpetual preferreds, with price talk originally around 5.25% to 5.375%. The talk was then revised to the 5.25% area, according to a trader.

"It's doing pretty well," he said ahead of pricing.

By the end of the day, the deal had priced, coming upsized at $450 million with a yield of 5.2%

Meanwhile, Allstate Corp.'s 5.1% fixed-to-floating rate $25-par subordinated debentures due 2053 - a deal that priced late Thursday - was continuing to fly high, a trader said. Another market source said it was among the most actively traded issues of the day.

The primary arena is expected to get busy in the near term, following the trend of 2012. A trader said that several real estate investment trusts have been filing shelf registrations, so that space in particular could be active in the new issue market.

Overall, it was an up day for preferreds, though they didn't start that way.

A market source said the market was "kind of all over the place," opening down first thing. By mid-morning, the preferred space was essentially flat, he said, until a late-day boost brought it higher.

As for liquidity, it was "more active in the morning, then it faded" by afternoon.

Public Storage prices

Public Storage, the Glendale, Calif.-based storage company, announced and then priced an offering of series W cumulative redeemable perpetual preferreds on Monday.

Initially, the deal was expected to be about $150 million, with talk between 5.25% and 5.375%. Talk was later revised to around 5.25%.

The new issue priced later in the day, coming upsized at $450 million with a 5.2% dividend.

Ahead of pricing, a trader said the deal was "doing well," seeing paper trade around $24.70 in the gray market as of midday.

Public Storage issues typically tend to do well in the primary.

Later in the day, the trader said the preferreds were trading around $24.77.

After the bell, another market source quoted the issue at $24.75 bid, $24.85 offered.

"That's average-ish," he said of the paper's performance, noting it was "not really good, not really bad."

Allstate flying high

Allstate's recent 5.1% fixed-to-floating rate debentures due 2053 continued to soar after pricing late Thursday.

The issue freed to trade on Monday.

At midday, the trader quoted the first new issue of 2013 at $25.75 bid, $25.90 offered.

"Someone must be short," he said.

At the close, another source commented that the issue was among the day's most actively traded securities, rising a penny to $25.60.

Allstate is a Northbrook, Ill.-based insurance company.

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