New issues keep coming despite slow week; Fifth Street upsizes notes; DDR trades actively

By Stephanie N. Rotondo

Phoenix, March 27 - Though many desks remained empty on Wednesday, more new issues were entering the preferred stock marketplace, even as the broad market was deemed "flat."

Fifth Street Finance Corp. said it would offer a minimum of $50 million $25-par senior notes due 2028, with price talk between 6.125% and 6.25%, a trader said.

The trader noted that he had not seen many markets in the gray as of midday but did peg the issue at $24.80.

Pricing came after the close, with $75 million of the notes being sold at par to yield 6.125%.

Elsewhere in the primary space, DDR Corp.'s recently priced $150 million issue of 6.25% class K cumulative redeemable preferreds was moving up in the midweek session.

A trader quoted the paper at $24.78 bid, $24.82 offered. Another market source said the issue was among the day's most actively traded securities.

The deal priced Monday. Proceeds will be used to call the company's 7.375% class H cumulative redeemable preferreds.

RBS preferreds decline

Royal Bank of Scotland Group plc's securities were taking a hit as the Bank of England said the region's banks faced a £25 billion capital shortfall.

The 5.9% noncumulative guaranteed trust preferreds (NYSE: RBSPE) fell 63 cents, or 2.92%, to $20.93. The 6.08% noncumulative guaranteed trust preferreds (NYSE: RBSPG) were off the most, losing 80 cents, or 3.67%, to end at $20.98.

The 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) dropped 32 cents, or 1.37%, to $24.39.

When Bank of England made its announcement, it did not get into specifics - that is, it did not say which bank or banks currently had shortfalls. But of the U.K.-based financial institutions, RBS was the only one to make a statement once the report came out.

"RBS has a strong capital position...we will continue to work with our regulators to ensure RBS remains at the forefront of international capital standards," the bank said.

While the statement on its face seemed positive, the fact that RBS was the only one to say anything about the shortfall might have spooked investors.

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