BB&T day's 'big news,' company to call all trust preferreds; Ally active, mixed; Vornado slips

By Stephanie N. Rotondo

Portland, Ore., April 21 - A preferred stock market source said the "big news" of Thursday was BB&T Corp.'s earnings.

The source said that in addition to reporting its earnings, the bank said it plans to call its trust preferreds. As a result, the preferreds gained ground.

Meanwhile, Ally Financial Inc. continued to be the most actively traded name, though its preferreds ended mixed.

In recent new deals, Vornado Realty Trust's series J preferreds were weaker during the session. The preferreds have yet to list on the New York Stock Exchange.

BB&T preferreds gain

A market source said that news regarding BB&T's plan to call all of its trust preferreds was "obviously a good thing," sending the preferred stock upward.

"It takes away uncertainty in the marketplace," he said.

He saw the 9.6% series B preferreds trading 4 cents higher at $28.39 shortly before the market closed.

Another source saw the series A preferreds gaining 4 cents to close at $27.12.

In its earnings release, the Winston-Salem, N.C.-based bank said it will retire all of its $3.2 billion of trust preferreds in 2013.

"In advance of retiring these instruments, management plans to issue approximately $1.75 billion of tier 1 qualifying instruments in order to maximize the amount of these types of instruments allowable under the Basel III capital standards," the company said in the release.

For the first quarter of 2011, BB&T reported net income of $234 million, up 20.6% from the year before. Net income attributable to stockholders was $225 million, or 32 cents per share, up from $188 million, or 27 cents per share, in 2010.

The profit per share beat analysts' expectations, but revenues disappointed. Revenues came in at $2 billion, missing the expected $2.2 billion mark.

Ally ends mixed

Ally Financial's preferreds closed the session mixed, according to market sources.

One source saw the series A 8.125% hybrid trust preferreds unchanged at $26.00. The series B 8.5% preferreds were seen 8 cents higher at $25.94.

But another source said the series A paper dropped 7 cents before the close to end at $25.93. This source saw the series B preferreds finishing 9 cents better at $25.95.

The "Ally twins," as the source dubbed them, were the day's most active issues.

Ally is a Detroit-based bank.

Vornado weakens

Vornado Realty Trust's 6.875% series J preferreds ended Thursday with a softer tone, a source said. He pegged the paper at $24.84.

He noted that the securities have yet to be listed on the NYSE.

The New York-based real estate investment trust also said Thursday that its underwriters had fully exercised their over-allotment option, bringing the total offering to 8.05 million shares, or $201.25 million.

The REIT priced $175 million of the preferreds on April 14.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.