Preferred market stages comeback as Greece nears plan OK; Ally declines again; Gastar lists

By Stephanie N. Rotondo

Portland, Ore., June 23 - Preferred stocks were making a rebound of sorts towards the end of Thursday's session as the market responded to news that Greece's austerity plan would likely find support in the European Union and at the International Monetary Fund.

"Everything was kind of coming back," a trader said.

Still, there remained some concern about "how much exposure foreign banks have" to Greece's troubles, as "they have more leverage than U.S. banks," the traded notes.

In particular, the trader said that names like Royal Bank of Scotland Group plc and ING Groep NV were "getting hit" prior to the news.

Though the overall market did see a late-day rally, things were still off a quarter-point to a half-point, generally speaking.

"It wasn't a total sell-off," a trader remarked. "Good names held in there."

Meanwhile, Ally Financial Inc.'s preferreds did take another hit, and volume climbed up over the 1 million-share mark again.

And in new issues, there was "no news of new deals," a trader said. But another trader noted that Gastar Exploration USA Inc.'s $15 million face value issue of 8.625% series A cumulative perpetual preferreds listed on the American Exchange.

"It actually held in there," he said.

Greece nears austerity plan

News reports indicated that Greece and the EU and IMF were coming to terms on an austerity package that would help the financially strapped country avoid a default helped to buoy the overall marketplace.

Greece has been working to put a plan into action in order to receive more bailout funds from the EU and IMF.

But while that news was seen as largely positive - the Dow Jones Industrial Average went from losing 200-plus points to only dropping about 60 post-news - there remained concerns about foreign banks like Royal Bank of Scotland and ING Groep and their exposure to Greece.

"I read that ING has the least exposure," a trader said, also noting that such credits were "getting hit" ahead of the news. Even ING's preferreds "have been lagging."

RBS' series T preferreds (NYSE: RBSPT) "saw some action," a trader said. The preferred shares got as low at $17.99 before coming back to close at $18.16 apiece, down 11 cents from the previous day.

ING, meanwhile, also ended lower, but volume in the name was above average. The company's 6.20% perpetual debt (NYSE: ISP) dropped 31 cents to $21.85, on volume of 92,651 shares, more than twice the average daily volume.

One name that moved higher on the news was National Bank of Greece SA's 9% series A preferreds (NYSE: NBGPA). The stock earned 32 cents, closing at $10.32 per share.

Ally falls again

Ally Financial preferreds continued to fall off in Thursday trading, but volumes were up significantly from the day before.

"Ally's got hit," a trader said.

The 8.5% series A preferreds (NYSE; ALLYPA) fell 20 cents to $24.80, on volume of about 2.35 million shares.

Roughly 841,000 shares traded on Wednesday.

The 8.125% series B preferreds (NYSE: ALLYPB) declined 30 cents to $24.40 per share on volume of 1.29 million shares. That compared to volume of 736,300 previously.

There was no news out on the Detroit-based financial services company.

Gastar lists, hangs in

A trader said that Gastar Exploration USA's recent $15 million deal of 8.625% series A cumulative perpetual preferreds listed on the American Exchange on Thursday.

"It actually held in there," he said.

The shares (AMEX: GSTPA) opened at $23.00 - the preferreds were issued at $23.25 - and hit a high of $23.15 before settling back in at $22.95.

Gastar is a Houston-based natural gas exploration company.

Trader sees good value

One trader said there were a few names of the day that "held in nice" as the rest of the market gyrated.

One such name was Bank of America Corp. Its series H preferreds (NYSE: BACPH) closed unchanged at $25.84 each.

Also unchanged was Public Storage's 6.5% series Q preferreds (NYSE: PSAPQ), which ended at $15.60.

And, United States Cellular Corp.'s 6.95% $25-par notes (NYSE: UZA) slipped just 3 cents to finish at $24.98 apeice.

"They are very attractive names," the trader said.

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