BB&T frees to trade, hits levels near par; PNC, U.S. Bancorp remain active, firm; RBS rebounds

By Stephanie N. Rotondo

Portland, Ore., April 27 - Preferred stocks ended the week marginally higher, according to a market source.

"It was a more green day than red, but it was mixed," he said. "Volume was improved from earlier in the week."

A new issue from BB&T Corp. freed from the syndicate Friday. The preferreds traded up at that point, hitting some trades around par, though it ended just under that mark.

Meanwhile, Royal Bank of Scotland Group plc paper remained on a roller coaster. The bank's preferreds moved higher Friday after falling Thursday and gaining on Wednesday. The midweek gains were spurred by news of a dividend payout that turned out not to be as big of a deal as expected.

BB&T deal frees

BB&T's $500 million offering of 5.85% series D noncumulative perpetual preferreds, which priced on Thursday, freed to trade on Friday, a trader said.

The trader saw the preferreds trading around par at midday.

Another market source placed the issue at $24.93 at the close. About 2.26 million shares traded, he added.

"It's so retail," he said of the low-coupon deal. "At that level, there is no institution that is going to buy it."

Bank of America Merrill Lynch, BB&T Capital Markets, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are the joint bookrunners. Citigroup Global Markets Inc., Stifel Nicolaus & Co. Inc. and UBS Securities LLC are the lead managers.

BB&T will apply to list the new preferreds on the New York Stock Exchange under the ticker symbol "BBTPD." Settlement is expected Tuesday.

Each preferred has a liquidation preference of $25,000. They will be issued as $25 depositary shares each representing a 1/1,000th interest in a preferred.

Proceeds will be used for general corporate purposes. These may include potential acquisitions, stock repurchases, the repayment and/or refinancing of debt obligations, which may include the redemption of trust preferreds, and extending credit to or funding investments in BB&T subsidiaries.

BB&T is a Winston-Salem, N.C.-based financial holding company.

PNC, U.S. Bancorp still active

In other recent deals, PNC Financial Services Group, Inc.'s 6.125% fixed-to-floating-rate series P noncumulative perpetual preferreds continued to dominate trading, with about 2.64 million shares changing hands. A market source called the issue up 15 cents at $25.50.

U.S. Bancorp's 6.5% fixed-to-floating series G noncumulative perpetual preferred stock, which listed on the NYSE under the ticker symbol "USBPN" on Wednesday, also remained active, with about 915,000 shares trading. The preferred stock closed up 9 cents at $25.79.

RBS trades back up

Trading in Royal Bank of Scotland preferreds continued to be a ride. The paper regained some of Thursday's losses.

The preferreds had also gained on Wednesday on news of a dividend payout.

The 5.9% noncumulative guaranteed trust preferreds (NYSE: RBSPE) rose 20 cents, or 1.43%, to $14.17, while the 6.4% series M noncumulative dollar preference shares (NYSE: RBSPM) earned 15 cents to close at $16.71. The 6.6% series S noncumulative dollar preference shares (NYSE: RBSPS) increased by 20 cents, or 1.18%, to $17.15, and the 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) moved up 11 cents to $19.03.

On Wednesday, the market learned that the Edinburgh-based bank had declared dividends on 11% and 5.5% preference shares. The market initially reacted with enthusiasm, thinking that the payout was being made on issues that recently ended their mandatory no-pay period.

That was not the case, however. The issues being paid on are "must-pays." Once that was sorted out, investors pressured the preferreds come Thursday.

But late in the coming week, the bank is scheduled to hold a call in which it has promised to provide an update on the mandatory no-pay issues, and investors are hoping for at least a hint regarding whether or not those dividends will be turned back on.

Aegon up, Goldman down

Elsewhere in the secondary, Aegon NV's 8% noncumulative subordinated notes due 2042 (NYSE: AEK) gained 32 cents, or 1.24%, closing at $26.50.

Goldman Sachs Group, Inc.'s series D floating-rate noncumulative preferreds (NYSE: GSPD) meantime fell 6 cents to $20.45.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.