PrivateBank's new issue above par, hard to find; Discover's preferreds hang in; REITs busy

By Stephanie N. Rotondo

Phoenix, Oct. 12 - It was subdued in the preferred stock market as the week wore down, a trader said Friday.

Even PrivateBancorp Inc.'s new $125 million of 7.125% $25-par subordinated debentures due 2042 were "very thinly traded," the trader said, though he opined that was due more to the small size of the deal.

"Nobody was really allowed in," he said. "So it's tightly held and it's hard to find stock."

Meanwhile, real estate investment trusts and related issuers - such as homebuilders - have been actively traded recently, though typically on no credit-specific news. That was in fact the case in Friday trading, leaving one market source to opine that "some people just might want to take some bets off the table."

PrivateBancorp above par

PrivateBancorp's new 7.125% subordinated debentures due 2042 were "doing well," a market source said Friday, though overall activity in the name was light.

At midday, one trader said the issue was trading as high as $25.60.

After the market closed, a source said the issue had traded between par and $25.40 most of the day. The volume weighted average price was $25.28.

The deal came Thursday after the company revised pricing from a 7.375% to 7.5% range to 7.125%. Even ahead of the pricing, the deal had been trading at or above par in the gray market.

Discover holds in

Discover Financial Services' recently priced 6.5% series B noncumulative perpetual preferreds were holding in, according to a trader.

He quoted the issue at $25.35 bid, $25.50 offered. That was down a bit on the bid side but steady on the offer side.

Discover brought the deal on Tuesday. Like PrivateBancorp, it was immediately trading at or above par.

REITs getting some action

REIT preferreds have been active of late, even without any credit-specific news to drive the activity.

A market source noted that REIT paper was generally at "the most expensive levels ever," which may have some investors taking profits.

He also noted that Standard & Poor's preferred index had a "rebalance" last week and that for those funds or investors that use the index to build their portfolios, the recent REIT action could simply be people moving things around.

Weingarten Realty Investors was on the day's most active list, as its 6.5% series F cumulative preferreds (NYSE: WRIPF) rose 9 cents to $25.42. CommonWealth REIT was also on the list, its 6.5% series D cumulative preferreds (CWHPD) gaining 11 cents to $24.05.

In related sectors, homebuilder M/I Homes Inc.'s 9.75% series A noncumulative preferreds (NYSE: MHOPA) put on 42 cents, or 2.09%, ending at $20.52.

GE Capital notes list

General Electric Capital Corp.'s 4.875% $25-par notes due Oct. 15, 2052 listed on the New York Stock Exchange Friday.

The ticker symbol is "GEB." The $825 million issue priced Oct. 2.

The notes ended the day at par, unchanged from the open. However, over half a million shares changed hands.

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