Midday Commentary: Interstate Power, Sabra Health Care launch new deals; Fannie, Freddie gaining

By Stephanie N. Rotondo

Phoenix, March 14 - The new issues kept coming on Thursday, as Interstate Power & Light Co. and Sabra Health Care REIT Inc. announced plans for preferred stock offerings.

Interstate said it would issue a minimum of $100 million of series D cumulative perpetual preferreds. A trader said the deal would likely be increased to $150 million.

Price talk is 5.25% to 5.375%, he said.

"They'll probably push the yield to 5.125%," he added.

The trader said the issue was "trading well," seeing a $24.92 bid, par offered quote in the midday gray market.

Sabra meantime said it would sell at least $50 million of series A cumulative redeemable preferreds.

That issue was being talked around 7.25%.

A trader said there was no selling group on the deal, pegging the paper at $24.70 bid, $24.80 offered.

In other recent deals, Summit Hotel Properties Inc.'s new $75 million issue of 7.125% series C cumulative redeemable preferreds - a deal that came Wednesday - was trading around par, according to a trader.

In the secondary, a trader said that Fannie Mae and Freddie Mac preferreds were on the rise during Thursday's session. The gains were attributed to an article in The Wall Street Journal that said a privatization of the mortgage firms would not be ideal, given that they are such "cash cows," the trader said.

He called the preferreds all up 30 cents to 40 cents in early trading.

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