Gabelli Equity Trust, Resource Capital plan deals; Apollo hits NYSE; Aflac sees heavy trading

By Stephanie N. Rotondo

Phoenix, Sept. 24 - Preferred stocks were "pulling back a little bit," a trader said on Monday.

Though the market was coming in, that didn't stop the primary from kicking out new deals.

Gabelli Equity Trust Inc. announced plans to sell at least $50 million of series H cumulative perpetual preferred stock.

Price talk is 5% to 5.125%, according to a trader.

Also, Resource Capital Corp. said it will issue series B cumulative redeemable perpetual preferreds. A trader said the deal had yet to launch as of midday. After the bell, another market source stated that he had not seen any further details about the offering.

Among recent deals, Apollo Residential Mortgage Inc.'s $150 million of 8% series A cumulative redeemable preferreds officially listed on the New York Stock Exchange Monday.

Gabelli plans new issue

Gabelli Equity Trust intends to issue new series H cumulative perpetual preferreds, the company announced Monday.

A trader opined that the deal "should do well," considering its investment-grade ratings.

He saw the paper at $24.80 in the gray market as of midafternoon.

At the close, a market source said the deal had yet to price, noting that most of the issuance would likely go to "true Mom and Pops, true retail" investors.

"It's a much better credit than most of what you find in our market," the source said, noting that this kind of deal is typical of Gabelli. Its business model has "an incredibly strong history of doing well."

Bank of America Merrill Lynch is the bookrunner. Gabelli & Co. Inc. is the co-manager.

Proceeds will be used to redeem the company's 6.2% series F cumulative preferreds. Any remaining funds could be used for further preferred redemptions.

The company announced on Aug. 16 that it will redeem $53 million of the series F preferreds on Wednesday.

The preferreds (NYSE: GABPF) traded down 4 cents to $25.50 on Monday.

Gabelli is a non-diversified, closed-end management investment company based in Rye, N.Y.

Apollo lists

Apollo Residential Mortgage's new 8% series A cumulative redeemable preferreds listed on the NYSE Monday.

The deal priced Sept. 13. The ticker symbol is "AMTGPA."

The issue was trading up 9 cents at midafternoon at $25.09.

Apollo is a New York-based real estate investment trust.

Aflac dominates

A market source said that "aside from one issue," volume in the preferred stock arena was "pathetic" during Monday trading.

That one issue was Aflac Inc.'s recent $450 million offering of 5.5% $25-par subordinated debentures due 2052.

About 2.2 million notes changed hands, the source said.

The last price of the day was $25.25, according to the source, though he did not think that was an accurate price. Most of the trades occurred in a range of $24.67 to $24.82, he noted. The volume-weighted average price was $24.78.

Columbus, Ga.-based Aflac priced the deal Sept. 20.

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