RBS, ING take a beating on renewed Greece fears; Barclays on the rise; Protective Life lists

By Stephanie N. Rotondo

Portland, Ore., May 23 - Preferred stocks of foreign issuers took a beating Wednesday as concerns about Greece were again renewed.

European leaders met Wednesday to further discuss contingency plans in the event that Greece elects to exit the euro zone. Leaders have repeatedly said they want the struggling nation to stay but that in order to do so, it must maintain its recent efforts to shore up its books.

While most banks have already accounted for Greece-associated losses on their balance sheets, concerns remain about how a total default would affect banks and the larger European economy. As such, names like Royal Bank of Scotland Group plc and ING Groep NV were succumbing to investor pressure, though most issues ended up from intraday lows.

Barclays plc, however, was a bright spot among foreign issuers. The bank announced that it will receive $5.5 billion from the sale of its stake in BlackRock Inc.

In recent issues, Protective Life Corp.'s $250 million issue of 6.25% 30-year subordinated debentures began trading on the New York Stock Exchange on Wednesday. The deal priced May 15 and was upsized from $150 million.

Also, a trader said the 5.625% perpetual cumulative trust preference securities issued by Southern California Edison Co.'s SCE Trust I experienced a pop by the end of the day after declining in the last few sessions.

RBS, ING get beat up

Worries that Greece might soon drop the euro - and how that would affect the broader European economy - put pressure on the preferred market, especially on foreign issuers.

Royal Bank of Scotland's 5.9% noncumulative guaranteed trust preferreds (NYSE: RBSPE) lost a quarter, or 1.81%, to end at $13.60. The 6.08% noncumulative guaranteed trust preferreds (NYSE: RBSPG) meantime fell 20 cents, or 1.45%, to $13.59.

Though down on the day, the RBS preferreds did rally slightly from midday levels. At one point, the 5.9% preferreds were down 29 cents, or 2.09%, at $13.56 and the 6.08% preferreds had slipped 26 cents, or 1.89%, to $13.53.

ING Groep was also feeling the pain in the midweek session. The 7.275% perpetual hybrid capital securities (NYSE: IDG) closed down 32 cents, or 1.4%, at $22.55. Like RBS, that was up some from midday levels, when the paper had dropped 60 cents, or 2.62%, to $22.27.

Barclays bucks downward trend

Many foreign issuers were "getting beat up," as one trader put it, but Barclays managed to end the day modestly higher.

The 8.125% series 5 noncumulative callable dollar preference shares (NYSE: BCSPD) earned 9 cents on the day, finishing at $25.53. The 7.75% series 4 noncumulative dollar preference shares (NYSE: BCSPC) increased 12 cents to $25.08.

The U.K.-based bank - the nation's second largest - said late Tuesday that it will receive $5.5 billion from a sale of its stake in BlackRock. Barclays sold 26.2 million shares in the company at $160.00 per share, and the underwriters - Barclays Capital Inc., Morgan Stanley & Co. LLC and Bank of America Merrill Lynch - have an over-allotment option for another 2.6 million shares.

Additionally, New York-based BlackRock, a closed-end fund manager, will buy back 6.38 million shares at a discounted price of $156.80 per share.

Protective Life lists

Protective Life's $250 million issue of 6.25% 30-year subordinated debentures began trading on the NYSE on Wednesday. The ticker symbol is "PLPC."

"It's basically trading where it was," a trader said at midday, adding that there was "low volume."

As of 2 p.m. ET, the securities were trading at $24.65.

After the bell, another trader said the preferred stock "got better. It's a good buy for agencies."

The issue ended the day at $24.78.

Proceeds from the sale are being used to redeem one or more of the $100 million of 7.5% trust originated preferred securities due 2031 issued by PLC Capital Trust III, the $115 million of 7.25% trust originated preferred securities due 2032 issued by PLC Capital Trust IV and the $200 million of 7.25% capital securities due 2066 issued by Protective Life.

Protective Life provides financial services, insurance and investment products and is based in Birmingham, Ala.

SoCal Edison reverses course

After declining in the earlier part of the week, SoCal Edison's 5.625% perpetual cumulative trust preference securities, which listed Tuesday, "popped," according to a trader on Wednesday.

He said paper had been trading in a $24.20 bid, $24.25 offered context but moved up to levels around $24.45 by the end of the day.

The trust preferreds (NYSE: SCEPF) finished at $24.37, up 12 cents from the day before.

SoCal Edison is a Rosemead, Calif.-based subsidiary of Edison International Inc.

Rumored deal delayed

A trader said that a deal expected to hit the market Wednesday via Morgan Stanley failed to show during the session.

"We never saw that deal come," he said, noting that it was likely due to the market's poor performance.

Another trader said he had also heard of the deal, but he added that he did not think it was likely to come during this week.

"I don't think they're going to bring a deal in this market," he said.

The trader also said that he "heard the deal is kind of unique. It might be a financial."

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