First National Financial Corp. is in the market with the first substantial new deal in 2011. The mortgage lender is selling $100-million of rate reset preferred shares.

It's a fitting start to the year. Because the equity market has been so hot and some names are getting bought, some institutional investors have started moving down the food chain to more speculative plays. But retail investors still love their yield. Converts and preferred shares sold like bottles of water in the desert heading into year-end 2010.

Add to that investors' love for real estate plays right now, and it looks like a match made in heaven. The S&P/TSX real estate sub-index was up 26 per cent in 2010, compared with a 14 per cent gain for the broad index. And real estate-related companies have also been on a roll, with firms like Genworth MI Canada performing well in the second half of 2010.

First National's new pref shares have a 5-year life and pay 4.65 per cent annually, representing a 207 basis point spread over Canada bonds. They cost the usual preferred share price of $25 each.

RBC Dominion Securities and Scotia Capital are co-lead underwriters.