AmTrust prices noncumulative preferreds; National General climbing up; Legacy units list

By Stephanie N. Rotondo

Phoenix, June 25 – The preferred stock market remained firm in midweek trading, according to the Wells Fargo Hybrid and Preferred Securities index.

The index closed up 10 basis points.

“The market was pretty much up all day,” a market source said. However, he noted that it came down from its highs in the last few minutes of trading.

In the primary, AmTrust Financial Services Inc. priced $100 million of 7.25% series B noncumulative perpetual preferreds.

The company initially announced plans to sell at least $75 million of the preferreds, which were talked at 7.25% to 7.375%.

A trader said the paper was trading around $24.62 in the early gray market.

The trader said he wasn’t all that surprised another insurance company came to market, even as National General Holdings Corp. failed to price the maximum amount of its 7.5% series A noncumulative preferreds last week.

National General had initially planned to sell $100 million of the preferreds but actually came with just $55 million.

“[AmTrust] is in growth mode and they don’t want to dilute the common,” the trader surmised. “Maybe you raise a little less, maybe you pay a little more, but you need the capital.”

The AmTrust deal came via joint bookrunners Morgan Stanley & Co. LLC, UBS Securities LLC, Goldman Sachs & Co. and J.P. Morgan Securities LLC. Keefe Bruyette & Woods Inc. is a lead manager.

Co-managers are William Blair & Co., JMP Securities LLC, Sidoti & Co. LLC and Compass Point.

AmTrust’s 6.75% series A noncumulative preferreds (NYSE: AFSIPA) meantime ended the day down 30 cents, or 1.25%, at $23.77.

As for the National General issue, it has been steadily climbing higher this week. In early Wednesday trading, a trader pegged the issue at $24.90.

Legacy lists, Safe rises

Legacy Reserves LP’s $175 million of 8% series B fixed-to-floating rate cumulative redeemable preferred units began trading on the Nasdaq on Wednesday.

The ticker symbol is “LGCYO.” The deal came June 10.

Paper was trading at $24.93 at midday versus an opening level of $24.95.

The issue closed at $24.88.

From Monday’s business, Safe Bulkers Inc.’s $70 million of 8% series D cumulative redeemable preferreds were on the rise, according to a source.

Around mid-afternoon, the source saw the paper quoted at $24.80 bid, $24.90 offered. Shortly before the market closed, the issue was being quoted at $24.87 bid, $24.95 offered, he said.

The preferreds freed to trade on Tuesday.

JPMorgan, RBS busy

A market source said that “volume was better than it has been,” though he noted it was centered on two paying issues.

The dominator of the day was JPMorgan Chase & Co.’s $850 million issue of 6.3% series W noncumulative preferreds, a deal that came June 17.

The source said about 2.23 million shares were exchanged and the preferred closed up 8 cents at $25.03.

Royal Bank of Scotland Group plc’s 6.08% noncumulative guaranteed trust preferred securities (NYSE: RBSPG) was the runner-up, with about 2.18 million shares changing hands.

The issue closed up 15 cents at $24.04.

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