Ally preferreds end mixed on IPO news; Sunstone deal not priced yet, trades in gray market

By Stephanie N. Rotondo

Portland, Ore., March 31 - Month-end pricing pushed up the preferred stock market Thursday and some areas - the $1,000-par market, for example - saw trading volumes pick up.

Still, a trader noted that while overall volume was a mite higher, it was spread out over more issues.

"There was more green than red by about 70%," a trader said.

"It was mostly up today in $25-Land," said another trader.

Ally Financial Inc. remained a busy one, as the bank said it had filed its initial public offering plan. The IPO is expected to raise up to $100 million. However, none of the proceeds will go to Ally, as the stock sold will be shares held by the U.S. Department of the Treasury.

A trader said Ally Financial's 8.125% series A hybrid trust preferreds gained 2 cents on the day to end at $25.50, while the 8.5% series B perpetual preferreds fell 7 cents to $24.87.

"It's not a huge issue for the preferreds," the trader said. "As you can see, the results were mixed.

"Generally, it is going to be perceived as a positive because you are no longer under the government, or at least less so. But it's not like you are creating any new equity for them."

In the new issue realm, Sunstone Hotel Investors Inc.'s planned issuance of series D cumulative redeemable preferreds had yet to price, though it was expected to come to market by Friday.

"Tomorrow might be more active. It's the start of a new quarter," a trader opined. "But active is a relative term."

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