AmTrust frees up; Gladstone gets temporary ticker; Associated Banc, Customers list on NYSE

By Stephanie N. Rotondo

Seattle, Sept. 21 – Preferred stocks were firm as the Federal Reserve issued its latest policy announcement on Wednesday, holding interest rates steady for the time being.

The Wells Fargo Hybrid and Preferred Securities index finished 55 basis points better, after being up 15 bps at mid-morning.

“Almost all of [the gains began] at 2 p.m.,” a market source said. “So clearly the market took the Fed move as a positive for rates... at least in the short term.”

The source noted that Treasuries also improved a fair bit, but remarked that “preferreds lagged Treasuries.”

The central bank said that it was keeping interest rates at the current 0.25% to 0.50% rate. Notably, three members of the Federal Open Market Committee – Kansas City Fed president Esther George, Cleveland Fed president Loretta Mester and Boston Fed president Eric Rosengren – voted to raise rates to 0.50% to 0.75%, pointing to continuing signs of improvement in the economy and risk outlook.

A rate increase in December remains squarely on the table.

Given that the market was focused on the Fed, there were no new issues announced on Wednesday.

As for deals priced earlier in the week, AmTrust Financial Services Inc.’s $250 million of 6.95% series F noncumulative preferreds – a deal priced Tuesday – freed to trade by mid-morning, according to a trader.

The trader also noted that the issue had been assigned a temporary trading symbol, “AMTRP.”

The preferreds ended the day at $25.03, versus opening levels of $24.95. About 1.53 million of the shares were exchanged on the day, making the issue the most actively traded security of the day.

Gladstone Investment Corp.’s $50 million of 6.25% series D cumulative term preferred stock were meantime pegged at $24.80 bid, $24.90 offered early in the day, though the issue closed at $24.97.

Still, that was off from $25.01 at the open.

That deal came Monday and freed Tuesday afternoon. It also has a temporary symbol, “GADDP.”

Meanwhile, both Associated Banc-Corp’s $100 million of 5.375% series D noncumulative preferred stock and Customers Bancorp Inc.’s $75 million of 6% series F fixed-to-floating rate noncumulative perpetual preferred stock began trading on the New York Stock Exchange on Wednesday.

The Associated Banc-Corp symbol is “ASBPD.” That deal priced Sept. 7.

Paper was trading at $25.06 at mid-morning, up from opening levels of $25.02. It closed at $25.10.

Customers’ preferreds were also trading at $25.06 at mid-morning, versus $24.51 at the open. The issue traded up to $25.20 by the bell.

The Customers ticker is “CUBIPF.” That issue priced Sept. 9.

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