Ally preferreds hang in as settlement announced; ING posts earnings, preferreds end mixed

By Stephanie N. Rotondo

Portland, Ore., Feb. 9 - Preferred stocks had "a decent rally at the beginning," a trader said Thursday, as investors learned of a $25 billion mortgage settlement with five big banks and that Greece was nearing a debt agreement with European leaders.

However, by the end of business, most names had trickled back down to end about flat.

Ally Financial Inc. continued to be active and moved up modestly on news of the mortgage settlement. Before the bell, a trader said the bank's preferreds were up as much as 50 cents in early trading, only to fall back by the end of the day.

Meanwhile, ING Groep NV put out earnings that "missed," a trader said. He said the preferreds fell on the back of the earnings but then rallied a bit on hopes of a deal in Greece. ING's preferred complex then ended the day mixed.

Ally hangs in on settlement

Ally Financial's preferreds were trading busily and better on word the bank - along with Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. - had reached a $25 billion settlement with 49 states regarding improper mortgage loan servicing and foreclosure practices.

The 8.5% trust preferreds (NYSE: ALLYPA) moved up 15 cents to $23.25. A trader remarked that the paper was up as much as 50 cents before settling back in.

Meanwhile, the 8.125% series A fixed-to-floating-rate preferreds (NYSE: ALLYPB) moved up a nickel to $21.95.

Under the terms of the settlement, the five banks will commit $20 billion toward mortgage relief. Another $5 billion will be paid directly to state and federal governments.

However, the deal has come under fire already for not providing enough relief to homeowners. For example, one relief program planned would give homeowners who were illegally foreclosed on a cash payment of up to $2,000 - but the homeowners would not get their homes back.

Ally is based in Detroit.

ING numbers miss

ING's earnings "missed a little bit," according to a trader. Still, news of a approaching debt deal for Greece helped ING preferreds stay positive for most of the day.

By the end of business, however, the preferreds were finishing in mixed fashion.

The 8.5% perpetual hybrid capital securities (NYSE: IGK) closed up 13 cents at $25.50, while the 7.375% perpetual hybrid capital securities (NYSE: IDG) rose 11 cents to $23.40.

But the 6.2% perpetual debt securities (NYSE: ISP) lost a nickel, closing at $20.05. The 6.125% perpetual debt securities (NYSE: ISG) were also weaker, falling 15 cents to $19.97.

The Amsterdam-based financial institution said in its earnings release Thursday that the European debt crisis is taking a toll on the financial sector and that it increased its loan loss provisions by 21% due to its exposure to Greek debt. Also, it took a €199 million writedown on Greek sovereign debt, an 80% loss.

Net profit was €1.19 billion. Analysts polled by Reuters had forecast profit of €1.34 billion to €2.45 billion.

New REIT issues trade well

Among recent new deals, Regency Centers Corp.'s 6.625% series 6 cumulative redeemable perpetual preferreds were hanging around par bid, $25.05 offered, according to a trader. The deal priced Tuesday.

Realty Income Corp.'s $325 million of 6.625% monthly income class F cumulative redeemable preferreds were quoted at $25.05 bid, $25.10 offered. The deal priced Jan. 31.

© 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.