Month-end sees sell-off in financial preferreds; new CubeSmart, Summit down with market

By Stephanie N. Rotondo

Portland, Ore., Oct. 31 - The month-end session saw a "sell-off" among financial preferreds, a trader reported Monday.

However, he was not sure what was driving the declines.

"People are looking forward to the G20 meeting," he said. If the summit supports Europe's latest plan to shore up its banks and provide Greece some relief, "that will push [the market] one way or another."

"It was a pretty down day," said another market source. Preferreds were "echoing the way equities fared."

He noted that there was "not a ton of volume."

Shortly before the market closed, a trader said foreign financial issuers such as ING Groep NV, Aegon NV and Royal Bank of Scotland Group plc were down 40 to 50 cents.

In the new issue market, recent deals from CubeSmart and Summit Hotel Properties Inc. were weakening with the market.

Foreign, U.S. financials fall

Month-end trading resulted in weakness for foreign issuers like ING Groep, Aegon and Royal Bank of Scotland.

ING's 7.375% perpetual hybrid capital securities (NYSE: IDG) fell 47 cents, or 2.22%, to $20.70, while the 8.5% perpetual hybrid capital securities (NYSE: IGK) dropped 56 cents, or 2.3%, to $23.75.

In Aegon paper, the 7.25% perpetual capital securities (NYSE: AEF) fell 37 cents to $23.45.

RBS' 7.25% noncumulative dollar preference shares (NYSE: RBSPT) meantime declined by 67 cents, or 4.36%, to $14.68.

National Bank of Greece SA's 9% series A noncumulative praference shares (NYSE: NBGPA) were deemed the day's biggest percentage loser, falling 72 cents, or 14.63%, to $4.20.

Among domestic financials, Ally Financial Inc.'s 8.125% series A trust preferreds (NYSE: ALLYPA) lost 37 cents, or 1.73%, to $20.96.

J.P. Morgan Chase & Co.'s 7.2% fixed-to-floating capital securities (NYSE: JPMPB) dipped 8 cents to $25.25.

New issues falter

Among recent new issues, deals from CubeSmart and Summit Hotel Properties were declining with the broader market.

CubeSmart's $70 million issue of 7.75% series A cumulative redeemable preferreds were quoted at $24.75 bid.

Meanwhile, Summit's $50 million issue of 9.25% series A cumulative redeemable preferreds were pegged at $24.60 bid, $24.75 offered.

A trader said he heard the deal was expected to list on the New York Stock Exchange on Tuesday, under the symbol "INNPrA."

And Gladstone Capital Corp.'s $35 million issue of 7.125% series 2016 term preferreds were seen at $24.65.

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