PNC, U.S. Bancorp steady; MetLife rises despite bad news; ING mixed as investors ponder Europe

By Stephanie N. Rotondo

Portland, Ore., April 23 - Preferred stocks ended flat to mixed on the day while the rest of the markets finished Monday's session weaker, source reported.

There were no new issues announced or priced Monday, but recent deals from PNC Financial Services Group Inc. and U.S. Bancorp remained active and steady.

In secondary dealings, MetLife Inc. was in the news after the company said it will pay out nearly $500 million in a settlement with more than 30 states regarding allegations that it did not pay out benefits to some policyholders. Despite the negative news, MetLife's preferreds moved higher.

Meanwhile, ING Groep NV ended the day mixed as investors wondered if the Netherlands, where ING is based, might lose its AAA credit rating.

PNC, U.S. Bancorp hold

Around midday, a trader saw PNC Financial Services' new $1.5 billion of 6.125% fixed-to-floating-rate series P noncumulative perpetual preferred stock holding around $25.05.

After the market closed, another market source said the issue closed at par, "kind of on the weak side of where it has been." However, he said there was a small trade at $25.19 and "some trades below par as well."

U.S. Bancorp's recent $1.09 billion offering of 6.5% fixed-to-floating-rate series G noncumulative perpetual preferred stock was also holding its ground.

At midday, a trader placed the issue at $25.40. At the close, paper was offered at $25.50, according to a market source. The closing price was $25.55, the source said, and the volume-weighted average price was $25.45.

"It didn't change much," he said.

PNC's deal priced Thursday. U.S. Bancorp priced April 17.

MetLife up despite bad news

MetLife's 6.5% noncumulative series B preferreds (NYSE: METPB) closed higher Monday despite negative news on the tape.

The preferreds gained 18 cents to end at $25.30.

The New York-based insurance company said Monday that it reached an agreement to pay $478 million in a multi-state settlement regarding allegations that the company did not pay out some life insurance benefits to policyholders and its use of the Social Security Administration's "Death Master File."

Of that amount, $188 million is expected to be distributed this year, and the rest will be paid out over the next 17 years.

According to state regulators, MetLife used the SSA's master file, knew that policyholders had died and still did not pay out the necessary benefits.

In a response posted on its website, MetLife said that it has a 99% payout rate and that it is working with regulators to ensure that anyone who should be receiving benefits does in fact get them.

ING closes mixed

ING Groep preferreds were mixed Monday as investors worried that the Netherlands, where ING is based, might lose its AAA credit rating.

The 7.375% perpetual hybrid capital securities (NYSE: IDG) fell a penny at $23.44, but the 8.5% perpetual hybrid capital securities (NYSE: IGK) rose 6 cents to $25.06.

The concerns about the Dutch credit rating came as the country's prime minister, Mark Rutte, failed to reach an austerity agreement with a coalition party. The government has been working to come up with a budget that would pass European Union targets.

The government is aiming for a budget that would bring the deficit to 3% of gross domestic product.

Kimco, Pebblebrook active

Real estate investment trusts were busy during the day's session.

Kimco Realty Corp.'s 7.75% series G cumulative redeemable preferreds (NYSE: KIMPG) gained two cents, closing at $25.52.

And Pebblebrook Hotel Trust's 7.875% series A cumulative redeemable preferreds (NYSE: PEBPA) earned 8 cents, finishing at $25.44.

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