Inland Real Estate prices new preferreds, but issue quiet; Xcel Energy to redeem preferreds

By Stephanie N. Rotondo

Portland, Ore., Sept. 29 - Overall market uncertainty, as well as empty desks due to Rosh Hashanah, resulted in muted volume for the preferred stock market on Thursday.

"With the holiday and indecision in Europe, nobody really cares," a trader said.

Still, the market saw a bit of an uptick, according to a market source. He said the market was up about 51 basis points, or 12 cents to 13 cents on average for $25-par issues.

"It was a lightened holiday day," he added.

"We had a good run-up, then it just rolled over with the equity markets," another trader said.

Inland Real Estate Corp. priced its $50 million new issue of series A preferreds. But given the deal's small size, traders were not really hearing much about the new issue.

After the bell, Xcel Energy Inc. announced that it was calling all outstanding series of its preferred stock. The redemptions will be done at par plus accrued dividends - which is higher than where the preferreds were last seen trading. There was no action in the name on Thursday.

Meanwhile, Allianz SE's preferreds were trading higher and relatively actively on news the insurance company might be looking to buy HSBC Holdings plc's general insurance business.

The day's most actively traded issues were the usual suspects, including Bank of America Corp. and Barclays plc.

Inland prices new deal

Inland Real Estate priced $50 million of series A cumulative redeemable preferreds at 8.125%, right on top of price talk.

However, because the deal was so small - just 2 million preferreds are being sold, plus a greenshoe for 300,000 more - traders said they had heard little to nothing about the new preferreds.

"Nobody is really saying much," a trader said. He noted that he saw a $24.55 bid for the paper early on but nothing else the rest of the day.

The Oak Brook, Ill.-based real estate investment trust intends to use proceeds from the offering for property acquisitions and possibly to pay down debt, the company said in its regulatory filing on Wednesday.

Xcel to redeem all preferreds

Minneapolis-based Xcel Energy said it will redeem all of its preferred stock on Oct. 31.

The total value of the transaction is $108 million plus accrued dividends. Each issue will be redeemed at par, which makes it a premium to where the preferreds have been trading.

The issues being redeemed are the $3.60 series cumulative preferreds (NYSE: XELPA) at $103.75 per share, the $4.08 series cumulative preferreds (NYSE: XELPB) at $102.00 per share, the $4.10 series cumulative preferreds (NYSE: XELPC) at $102.50 per share, the $4.11 series cumulative preferreds (NYSE: XELPD) at $103.732 per share, the $4.16 series cumulative preferreds (NYSE: XELPE) $103.75 per share and the $4.56 series cumulative preferreds (NYSE: XELPG) at $102.47 per share.

There was no trading in the name on Thursday, and all the issues are currently sitting well below their redemption prices.

Allianz gains ground

Allianz's 8.375% undated subordinated callable bonds - an unlisted issue - traded up 7 cents to $25.25 on volume of about 262,000 bonds, according to a market source.

The gains came as news broke that the German insurance company - along with AXA SA, QBE Insurance Group Ltd., PICC Property & Casualty Co. Ltd and Tokio Marine Holdings - is a potential bidder for HSBC Holdings' general insurance business.

The sale could raise as much as $1 billion, according to news reports.

The first round of bids are due by mid-October.

Banks stay busy

Among the day's most actively traded issues were Bank of America's 8.2% series H depositary shares (NYSE: BACPH), which fell 2 cents to $22.31.

The bank's Countrywide Financial Corp. unit saw its 7% capital securities (NYSE: CFCPB) gain a penny to close at $19.85.

Citigroup Inc.'s 8.5% fixed-to-floating trust preferreds (NYSE: CPJ) meantime rose 7 cents to $24.96.

In foreign issues, Barclays' 8.125% series 5 noncumulative callable dollar preference shares (NYSE: BCSPD) earned 24 cents, or 1.05%, to end at $23.18.

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