New Aviva, Winthrop deals fade with weak market tone; RBS, Santander, Great Plains lose big

By Stephanie N. Rotondo

Portland, Ore., Nov. 21 - Preferred stocks were under pressure Monday, in part due to the shortened holiday week and in part due to an admission of failure by Congress' so-called super committee.

"It appears to be not so super," a trader said of the group, which failed to provide $1.2 trillion in federal budget cuts.

The group has until Wednesday to come up with a plan, but prospects are not looking good.

"It's all a waiting game," the trader added, noting that Greece should get its bailout distributions in the next few weeks.

Aviva plc's $400 million of $25-par notes freed to trade Monday morning, according to traders. However, the general weakness of the market saw the new issue faltering.

Also losing were Winthrop Realty Trust's recently issued series D preferreds.

Among the day's biggest losers were Royal Bank of Scotland Group plc, Banco Santander, SA and Great Plains Energy Inc.

Aviva, Winthrop end heavy

London-based insurer Aviva saw its $400 million issue of 8.25% 30-year $25-par capital securities free to trade Monday. The deal priced Friday.

A generally negative market tone weighed on the new issue.

One trader saw the notes trading at $24.55. Another saw a $23.55 bid from a manager.

The company intends to use proceeds from the sale for general corporate purposes. Aviva expects the proceeds will also count as tier 2 regulatory capital.

Also in the primary market, Winthrop Realty's $40 million issue of 9.25% series D cumulative redeemable preferreds were at $24.55 offered, "with no bids in sight," according to a trader.

Another trader also saw the issue around $24.55.

The Winthrop deal also priced Friday.

RBS a big loser

Royal Bank of Scotland preferreds were among the day's biggest percentage losers, according to a market source.

"RBS across the board was way down," he said.

The 7.25% noncumulative dollar preference shares (NYSE: RBSPT) dropped 89 cents, or 6.18%, to $13.51. The 6.08% noncumulative guaranteed trust preferreds (NYSE: RBSPG) lost 58 cents, or 5.66%, to close at $9.67.

Banco Santander's 6.41% series 1 noncumulative guaranteed preferreds (NYSE: STDPI) were also a major downward mover. The preferreds fell 89 cents, or 4.18%, to $20.41.

"But there was very light volume," the market source said of trading in the name.

And, Great Plains Energy's $100-par 3.8% cumulative preferreds (NYSE: GXPPA) dropped $3.25, or 3.88%, to $80.50.

Financials dominate trading

Ally Financial Inc.'s two series of preferreds made the day's most active list, a market source reported.

The 8.125% series A preferreds (NYSE: ALLYPA) fell 40 cents, or 2.04%, to $19.25. The 8.5% series Bs (NYSE: ALLYPB) declined by 29 cents, or 1.62%, to $17.64.

Also active were Bank of America Corp.'s 7.25% series J noncumulative preferreds (NYSE: BACPJ) and the Merrill Lynch 8.625% series 8 noncumulative preferreds (NYSE: BMLPQ).

The former closed down 23 cents, or 1.05%, at $21.59. The latter slipped 37 cents, or 1.57%, to $23.25.

Active and higher were HSBC Holdings plc's 8% exchangeable perpetual subordinated capital securities (NYSE: HCSPB). The issue rose 3 cents to $26.38.

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