RBS, HSBC redemptions in focus; American Homes 4 Rent prices; La Salle Hotel up next

By Stephanie N. Rotondo

Seattle, May 17 – Redemption news from Monday continued to be a factor in Tuesday’s trading moves in the preferred stock market.

“There were a bunch of calls yesterday,” a trader said referring to Royal Bank of Scotland Group plc’s announcement that it would redeem three series of trust securities, as well as HSBC USA Inc.’s call of three series of preferreds.

All told, the redemptions will take out $4.55 billion of U.S.-listed preferred securities.

RBS paper was active and slightly better on Tuesday. The 6.08% noncumulative guaranteed trust preferred securities (NYSE: RBSPG) were steady at $25.27, though the 5.9% noncumulative guaranteed trust preferred securities (NYSE: RBSPE) were a penny higher at midday, trading at $25.27 as well.

The Edinburgh, Scotland-based bank is calling all $1.285 billion of its 5.9% securities, all $200 million of its 6.25% noncumulative guaranteed trust preferred securities (NYSE: RBSPI) and all $1.8 billion of the 6.08% noncumulative trust preferreds securities, according to a notice released Monday.

The redemption will take place on June 13 at a redemption price of par plus accrued dividends.

As for HSBC’s floating-rate series F noncumulative preferreds (NYSE: HUSIPF), they were up $2.49, or 10.97%, at $25.17. The 6.5% series H noncumulative preferreds (NYSE: HUSIPH) meantime dipped 36 cents, or 1.4%, to $25.37.

Both the Fs and Hs are being called, along with the floating-rate series G noncumulative preferreds.

That call will occur on June 30 at par plus accrued dividends.

American Homes prices

American Homes 4 Rent priced a $225 million sale of 6.5% series D cumulative redeemable preferreds early in the session.

The deal was first announced Monday, with price talk around 6.625%.

A trader said the issue was trading at par bid, $25.07 offered.

Raymond James & Associates Inc., FBR Capital Markets & Co., Keefe Bruyette & Woods Inc. and Wells Fargo Securities LLC were the joint bookrunners. BB&T Capital Markets, Janney Montgomery Scott LLC, Oppenheimer & Co. Inc. and Wunderlich Securities Inc. were the co-managers.

Also in the primary arena, LaSalle Hotel Properties announced plans to sell at least $100 million of series J cumulative redeemable preferreds.

Price talk is 6.375% to 6.5%. Wells Fargo Securities and BofA Merrill Lynch are running the deal.

A market source said the deal was slated to come Wednesday.

New deals to list

From last week’s business, DuPont Fabros Technology Inc. said the $26.25 million greenshoe on its $175 million offering of 6.625% series C cumulative redeemable preferreds – a deal priced May 10 – was exercised in full, lifting total issuance to $201.25 million.

A trader pegged that issue around $25.10.

The securities are expected to list on the New York Stock Exchange on Wednesday under the ticker symbol “DFTPC.”

Also expected to list on Wednesday are Public Storage’s $200 million of 5.125% series S cumulative preferreds, another deal from May 10.

The ticker will be “PSAPC.”

The preferreds were seen in a $24.90 to $25.02 context.

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