AmTrust preferred shares see turbulence; Deutsche Bank, RBS paper eyed; issuance slows

By Christine Van Dusen

Atlanta, Dec. 16 -AmTrust Financial Services Inc. remained in the spotlight on Monday as its preferred stock - which took a beating last week after allegations of accounting discrepancies - first bounced back and then ticked down again in trading.

The company's 6¾% series A noncumulative preferreds (AFSIPA) fell as far as $17.50 last week after an online provider of research issued a report that said AmTrust was using discrepancies in U.S. and Luxembourg accounting practices to avoid disclosing certain losses to the Securities and Exchange Commission. The website also claimed the company was tinkering with valuations on life-settlement contracts.

New York-based AmTrust, however, issued a statement denying the claims. And late on Thursday, two directors bought 200,000 shares each of the common stock, which helped the name recover in the market.

By Monday morning, the shares had bumped back up to about $20.00, the trader said.

"It was probably around $21.00 before the article came out," he said. "It's making its way back."

But the shares dipped back down to $19.84 by the close on Monday after equities researchers lowered their price target on shares of AmTrust. The company held a conference call after the market close on Monday night, to comment on the company's recent stock activity and provide an update on the outlook for year-end 2013 and 2014.

Maiden in focus

Maiden Holdings Ltd.'s 8.25% series A noncumulative preference shares on Monday did not experience quite as much turbulence as AmTrust, despite the fact that Maiden took a hit after the article appeared last week. AmTrust and Maiden work together via a quota share reinsurance agreement.

The Maiden issue (NYSE: MHPA) was seen last week at $23.60. On Monday morning the notes traded at $24.00. They closed at $24.10.

Deutsche Bank busy

In other trading of preferreds on Monday, Deutsche Bank Contingent Capital Trust III's 7.6% trust preferred securities were among the most active in the morning. The issue was spotted at $26.13, down 16 cents on total volume of 54,670.

Wells Fargo & Co.'s 8% non-cumulative perpetual class A preferred stock, series J, was quoted at $28.55, down 6 cents on volume totaling 51,913.

And Omnicare Capital Trust II's 4% Piers were also busy on Monday morning, trading at $72.84, up 93 cents on volume totaling 50,275.

"Other than that, it's pretty quiet out there," the trader said. "There's no talk of new issues coming today. I don't know if we're going to see anything this week."

Active afternoon for RBS

On Monday afternoon, Royal Bank of Scotland's 6.35% non-cumulative dollar preference shares, series N, were the most actively traded, closing at $20.79, down 8 cents on volume totaling 241,524.

Goldman Sachs Group's floating-rate non-cumulative preferred stock, series A, was also fairly active, relatively speaking, and closed down 22 cents at $17.55 on 233,348 shares traded.

And Merrill Lynch Capital Trust I's 6.45% trust preferred securities finished the day at $24.90, down 24 cents on volume totaling 220,043.

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