Preferreds firm as Scotland stays with U.K.; JPMorgan prices; Gabelli assigned temporary symbol

By Stephanie N. Rotondo

Phoenix, Sept. 19 – Preferred stocks were moving higher Friday “now that the Scottish scare is gone,” a trader said.

Scotland held a vote on its independence from England on Thursday. The country rejected the plan, choosing to stay part of the United Kingdom.

The Wells Fargo Hybrid and Preferred Securities Index ended the day up 27 basis points.

“Most of that was in the first half hour of trading,” one market source said of the session’s gains.

JPMorgan Chase & Co. priced $1.6 billion of 6.1% 1,000-par fixed-to-floating rate series X noncumulative perpetual preferred stock late Thursday.

Toward the end of Friday’s session, a trader quoted the new issue at 100.125 bid, 100.325 offered.

In early Friday trading, the notes were seen at 100.325.

A market source said he believed the issue had freed to trade.

The $1,000-par preferreds become callable on Oct. 1, 2024. On that date, the notes also begin to float at Libor plus 333 basis points.

JPMorgan Securities LLC ran the books.

Meanwhile, Gabelli Healthcare & WellnessRX Trust’s recently priced $35 million issue of 5.875% series B cumulative perpetual preferreds received a temporary trading symbol on Friday, according to one market source.

The issue came to market on Wednesday. The temporary symbol is “GBQXP.”

During Friday’s session the paper was seen trading around $24.95, down from opening levels of $25.02.

BofA Merrill Lynch ran the books.

As for American Financial Group Inc.’s $150 million of 6.25% $25-par subordinated notes due 2054, they were hanging around $24.70 bid, $24.77 offered.

The deal came on Monday, upsized from $100 million and at the tight end of talk. It freed to trade on Wednesday.

The new issue came via BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC.

RBS up as Scots stay in UK

Scotland’s vote to stay part of the U.K. pushed up Royal Bank of Scotland Group plc’s preferreds on Friday.

The 6.08% noncumulative guaranteed trust preferred securities (NYSE: RBSPG) rose 44 cents, or 1.85%, to $24.25.

The bank’s preferreds had been mostly lower on Monday ahead of the vote but had started to gain as the week progressed.

HSBC Holdings plc was also higher, its 8% exchangeable perpetual subordinated capital securities (NYSE: HSEB) gaining 13 cents to $26.83.

Scotland voted 55% in favor of staying with England. But leaders across the United Kingdom said that Scotland needed more say in what goes on within its borders.

Scotland’s first Prime Minister Alex Salmond resigned his post, saying that he would respect the vote but would also hold leaders accountable for last-minute promises of more autonomy.

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