BB&T preferreds soften, upcoming call still topical; Ally again most active, closes mixed

By Stephanie N. Rotondo

Portland, Ore., April 25 - The preferred stock market was mostly firm Monday, though a closed European market and the Easter weekend meant many desks were still vacant.

"It was pretty quiet still," a trader said. He noted that he did hear a rumor of a "restructuring deal," potentially from Merrill Lynch, but he added, "I don't think that's going to happen [on Monday]."

News from last week regarding BB&T Corp.'s plan to call its trust preferreds by 2013 was still deemed an "interesting" story. A trader opined that "we might start seeing more of these calls." However, the trader said that it might not do much for the new issue market, as he doesn't expect the new issues to pick up until Frank-Dodd goes into effect in 2013.

BB&T's preferreds closed weaker on the day.

Meanwhile, Ally Financial Inc.'s series A and B preferreds continued to top the most-active charts, though the shares ended the day mixed. The bank announced a dividend on some series of its preferreds last week.

BB&T preferreds soften

A trader saw BB&T's preferreds trading 3 cents to 4 cents weaker shortly before the market closed.

The series A preferreds were down 4 cents at $27.08, and the series B and C preferreds were each down 3 cents at $28.36 and $27.15, respectively.

After the close, another market source said the series B and C preferreds were only a penny weaker at $28.38 and $27.17, respectively.

In its earnings release Thursday, the Winston-Salem, N.C.-based bank said it would 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.

On Monday, the financial institution launched a $1 billion bond offering comprised of a $700 million issue of three-year fixed-rate debt and $300 million of floating-rate debt.

According to the Wall Street Journal, BB&T received orders for $1.7 billion of the new debt, the proceeds of which are expected to be used for general corporate purposes including acquisitions, share buybacks, debt refinancing or funding subsidiaries.

Ally ends mixed

Ally Financial's preferreds finished up Monday's session mixed, according to market sources.

One source called the series B preferreds down a penny at $25.94 and the series A preferreds higher by 2 cents at $25.95.

Another pegged the Bs at $25.95 and the As at $25.97.

On Thursday, Ally said its board of directors had approved dividend payments on its series F-2 preferred stock, held by the U.S. Treasury, as well as on its series G and A preferreds.

Ally is a Detroit-based bank and was formerly known as GMAC LLC.

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