Ally declares dividends, preferreds gain; banks generally move higher; Ashford to price add-on

By Stephanie N. Rotondo

Portland, Ore., Oct. 11 - The preferred stock market "definitely felt better," a trader said Tuesday, as investors were "putting on more risk."

Ally Financial Inc.'s preferreds got a bump up when the company declared dividends on the issues.

"It was a fat dividend," a trader said.

Other banks and financial institutions were also faring better, for the most part, giving names like Royal Bank of Scotland Group plc a push.

However, ING Groep NV issues were losing ground, and it was not clear why as there was no news out to act as a catalyst.

In the new issue realm, Ashford Hospitality Trust Inc. said it is planning a follow-on public offering of its 9% series E cumulative preferreds. The company originally issued over $80 million of the preferreds in April.

Ally up on dividend

Detroit-based Ally Financial said Tuesday that its board approved dividend payments on certain preferreds, which a trader said was "kind of nice."

Ally will pay the dividends on Nov. 15. The Department of the Treasury - which owns the series F-2 fixed-rate mandatorily convertible preferreds - will receive $134 million, or $1.125 per preferred.

Holders of the series G fixed-rate cumulative perpetual preferreds will get $45 million, or $17.50 per preferred.

For holders of the 8.5% series A fixed-to-floating-rate perpetual preferreds, the dividend payment is $22 million, or 53 cents per preferred.

The company noted that including the upcoming payment, it has paid out $2.6 billion to the Treasury since February 2009.

The series A preferreds (NYSE: ALLYPA) closed up 4 cents at $18.85. The 8.125% series B preferreds (NYSE: ALLYPB) also gained 4 cents, closing at $18.24.

Banks trend up

Foreign and domestic banks were trending generally higher on Tuesday, as it looked like Greece will get aid in November and U.S. attorneys general might soon reach an agreement on their mortgage probe.

"If that happens, we could see these bank stocks rally pretty quickly," a trader said of the reported meeting on Friday between the state attorneys general.

Royal Bank of Scotland's 6.08% series G noncumulative guaranteed trust preferreds (NYSE: RBSPG) moved up 18 cents, or nearly 2%, to $9.24. Also better were Citigroup Inc.'s 8.5% series J preferreds (NYSE: CPJ) and 7.875% fixed-to-floating trust preferreds (NYSE: CPN).

The former closed at $24.92, up 12 cents, while the latter gained a dime, ending at $25.63.

But the overall positive sentiment did not help ING Groep preferreds.

The 8.5% perpetual hybrid capital securities (NYSE: IGK) dropped 49 cents, or 2.07%, to $23.22, and the 7.2% perpetual debt securities (NYSE: INZ) fell 49 cents, or 2.38%, to $20.08.

Ashford announces follow-on

Ashford Hospitality Trust said it plans to re-open its 9% series E cumulative preferreds with a public offering.

The company originally issued $83.75 million of the $25-par preferreds on April 18.

The preferreds (NYSE: AHTPE) gained 4 cents, closing at $23.48.

"I wouldn't be surprised if we saw a new issue next week if the market holds up," a trader said.

The Dallas-based real estate investment trust is just one of several REITs that have been utilizing the otherwise subdued new issue preferred market of late, indicating an increased appetite for REIT preferreds. Currently, STAG Industrial Inc. and Preferred Apartment Communities are shopping new deals around.

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