Arch Capital prices $100 million tap of 5.45% preferreds; preferred stocks weaken

By Cristal Cody

Tupelo, Miss., Nov. 29 – Arch Capital Group Ltd. priced a $100 million reopening of its 5.45% series F non-cumulative preferred stock on Wednesday.

The deal follows transactions brought to the primary market on Monday from E*Trade Financial Corp. and NuStar Energy LP and on Tuesday from Andeavor Logistics LP, which priced a $600 million offering of fixed-to-floating rate cumulative redeemable perpetual preferred units.

In the overall market, preferreds remained soft on Wednesday.

The Wells Fargo Hybrid and Preferred Securities index, which was down 43 basis points at the start of the day, closed off 24 bps.

The U.S. iShares Preferred Stock ETF closed down 16 bps. The iShares ETF was down 39 bps at mid-morning.

NuStar Energy’s $150 million of $25-par 9% fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba3/B/B+) traded up 12 cents to $24.77 in over-the-counter trading under the temporary symbol “NSSTP”.

In its deal, Arch Capital priced a $100 million reopening of depositary shares that represent a 1/1,000th interest in its 5.45% series F non-cumulative perpetual preferred shares (/BBB/BBB) on Wednesday, according to an FWP filed with the Securities and Exchange Commission.

The company sold 4 million shares in the reopening at $25.16 per depositary share.

BofA Merrill Lynch and Wells Fargo Securities, LLC were the bookrunners.

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