Ally 'up big' on delayed rebound; Citigroup, Bank of America also better; Public Storage gains

By Stephanie N. Rotondo

Portland, Ore., Aug. 31 - A preferred stock trader said Ally Financial Inc.'s securities were "up big" Wednesday while "everything else was up moderately."

There was no fresh news out on the company, but over the weekend the financial services firm's preferreds were given a positive nod by a Barron's article. The trader opined that Ally's preferred shares had been oversold recently and that the gains were the result of a delayed rebound.

"I thought the selling of the preferreds was well overdone," he said. "And they never experienced the rebound everything else did."

Away from Ally, the financial preferred arena remained the most actively traded, led by Citigroup Inc. and Bank of America Corp.

Meanwhile, Public Storage's preferred complex was "mostly green," according to a market source, after the company called all of its 7% series G preferreds on Tuesday.

Ally climbing higher

Ally Financial's 8.5% series A preferreds (NYSE: ALLYPA) and 8.125% series B preferreds (NYSE: ALLYPB) were "up big" in Tuesday trading, according to a trader.

Both issues made the top four most actively traded list, according to another market source.

The As moved up $1.25, or 6.22%, to $21.35 on volume of about 1.46 million preferreds. The Bs rose $1.42, or 7.4%, to $20.62, with just over 640,000 preferreds trading.

There was no news out on the company that would explain the gains, the first trader said, though generally financial preferreds have been positive recently.

"I didn't have any answers as to why they were down so much from the rest of the preferred world either," he said. He noted that there was a feeling of "concentrated risk" to the mortgage market but added that Ally had no more - and more than likely, probably much less - risk than Bank of America.

"The risk/reward was there," he said. "It's not like they are going to willy-nilly turn off the dividends."

Additionally, he said that Ally is "very well capitalized," leading him to believe that Ally's recent downturn was more about the "overhang of unlimited risk with this mortgage liability thing."

He was quick to point out that while Bank of America stepped away from the larger group that is negotiating a settlement for the mortgage debacle, Ally "has stayed with the group negotiations. I don't think they have as much of the unbelievable liability as Bank of America has with Countrywide."

Citi, Bank of America gain

Also active and higher in the financial realm were Citigroup's 7.875% fixed-to-floating series N trust preferreds (NYSE: CPN) and Bank of America's 8.2% series H depositary shares (NYSE: BACPH).

The Citi issue increased by 12 cents to $26.04, with nearly 1.5 million trust preferreds changing hands. The Bank of America paper meantime rose 30 cents to $24.90 on volume of about 739,5000 shares.

Public Storage moves up

Public Storage's preferred structure was "mostly green," aside from a couple of issues that went negative, including the 7% series G cumulative preferreds (NYSE: PSAPG) that were called on Tuesday.

"Which is what you would expect because they were trading at a premium," a market source said.

The Gs fell 17 cents to $25.38. The issue is being called at par plus accrued dividends. The redemption date is Sept. 30.

The 6.625% series M cumulative depositary shares (NYSE: PSAPM), however, gained 14 cents to close at $25.55. The 6.45% series F cumulative depositary shares (NYSE: PSAPF) were also better, rising a dime to $25.24.

The redemption of the $100 million issue of preferreds is the most recent redemption by the Glendale, Calif.-based real estate investment trust. In July, the company called about $425 million of its 7.25% cumulative series K preferreds and did two redemptions of the 7.25% cumulative series I preferreds before that.

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