Sun Communities sells upsized preferreds; City National steady; Everbank paper firms

By Stephanie N. Rotondo

Phoenix, Nov. 6 - Preferred stocks were mixed to higher on Election Day and new issues continued to be a focus.

The primary market saw another new issue hit the tape Tuesday as Sun Communities Inc. announced plans to issue at least $50 million of series A cumulative redeemable perpetual preferred shares.

The deal priced at the close, coming upsized at $75 million with a yield of 7.125%.

Price talk had been around 7.25%.

"It's a small deal," a trader said. "But they were letting people in; it looks like it's doing fine."

"It will probably be packed away to retail," he added, seeing a "standing [$24.65] bid" for paper in the midday gray market. He noted that the bid "could be from a manager."

In new listings, Regions Financial Corp.'s recent $500 million of 6.375% series A noncumulative perpetual preferreds - a deal that priced Oct. 25 - were admitted for trading to the New York Stock Exchange, as was expected.

Also listed were Oriental Financial Group Inc.'s 7.125% noncumulative perpetual preferreds.

Elsewhere in the secondary, a trader remarked that Fannie Mae and Freddie Mac preferreds were "up marginally" following the release of third-quarter results from Freddie.

The government-backed mortgage provider posted a profit of $2.9 billion.

Sun Communities prices

Sun Communities sold $75 million of 7.125% series A cumulative redeemable perpetual preferred shares on Tuesday.

After pricing, a trader pegged the issue at $24.85 bid.

Citigroup Global Markets Inc. and Bank of America Merrill lynch are the joint bookrunners.

The Southfield, Mich.-based real estate investment trust will use a portion of the proceeds from the offering for a planned acquisition of Rudgate Properties, which is expected to close Nov. 15. Any remaining funds will be used for financing activities, to fund possible future acquisitions of properties and for working capital and general corporate purposes.

City National, Everbank eyed

City National Corp.'s new $175 million issue of 5.5% series C noncumulative perpetual preferreds - a deal that priced late Monday - was "hanging" around $24.60 bid, $24.70 offered, a trader said at midday.

In other Monday pricings, Everbank Financial Corp.'s $150 million of 6.75% series A noncumulative perpetual preferreds freed from the syndicate and was trading around $24.70, the trader said.

The trader noted that while Everbank had freed, he had not yet seen the "all clear" on City's new deal.

By the end of the day, City's new preferreds were quoted at $24.60 bid, $24.65 offered, while Everbank's were seen at $24.73 bid, $24.80 offered.

Regions, Oriental list

Regions Financial's recent offering of 6.375% series A noncumultiave preferreds hit the NYSE Tuesday.

The ticker symbol is "RFPA." Paper was trading at $24.81 at midafternoon, down 4 cents. At the close, the issue was down 7 cents at $24.78.

Oriental Financial Group's new 7.125% noncumulative perpetual preferreds also listed Tuesday. The symbol is "OFGPD." The shares ended at $24.65, unchanged.

The $24 million deal priced Oct. 31.

Profit boosts Freddie, Fannie

A trader said Fannie Mae and Freddie Mac paper was gaining ground after the latter reported a $2.9 billion profit for the third quarter.

The 8.375% fixed-to-floating rate noncumulative perpetual preferreds linked to Freddie (OTCBB: FMCKJ) put on 8 cents, or 4.57%, to close at $1.83. The 8.25% fixed-to-floating rate series S noncumulative preferreds issued by Fannie (OTCBB: FNMAS) rose 3 cents, or 1.71%, to $1.78.

Freddie's quarterly profit compared to a $4.4 billion loss for the same quarter in the previous year.

The firm also said that it had paid a $1.8 billion dividend to the U.S. Department of treasury and that it had not asked for further government aid.

That marks the sixth quarter since September 2008 in which Freddie has not sought more government assistance.

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