Sunstone Hotel to price new cumulative preferreds; BB&T frees to trade; GSE paper firms

By Stephanie N. Rotondo

Seattle, March 3 – The preferred stock new issue pipeline was showing no signs of letting up on Thursday as Sunstone Hotel Investors Inc. announced an offering of series E cumulative redeemable perpetual preferreds.

A market source said price talk was around 7%, with Wells Fargo Securities LLC and BofA Merrill Lynch running the books.

Another market source said the deal was slated to price on Friday.

The Aliso Viejo, Calif.-based real estate investment trust plans to use the proceeds in part to redeem some or all of its outstanding 8% series D cumulative redeemable preferreds (NYSE: SHOPD). That issue was inching higher, rising 6 cents to $25.40.

From midweek business, BB&T Corp.’s $425 million of 5.625% series H noncumulative perpetual preferreds had not yet freed as of mid-morning, according to a trader, but did free later in the day.

The issue was also assigned a temporary trading symbol, “BBTTP.”

The preferreds ended the day at $24.80, down from opening levels of $24.82.

A market source quoted the paper at $24.75 bid, $24.85 offered.

Separately, Fannie Mae and Freddie Mac’s preferreds were inching higher on Thursday as investors weighed Wednesday’s ruling from the Ninth Circuit Court of Appeals.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 6 cents, or 1.91% to $3.20, while Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) improved 8 cents, or 2.52%, to $3.25.

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