RBS mostly firm on euro zone bailout; PNC's called preferreds fall; Entergy bounces around

By Stephanie N. Rotondo

Phoenix, June 29 - It was a "pretty dead Friday," a preferred stock trader reported.

The secondary space, he said, was "up marginally" on news that euro zone leaders had come to terms on a deal to bail out Spanish and Italian banks. But the gains were not as much as he expected.

"I thought we'd see more of a pop," he said.

Another market source said the preferred arena was "bouncing around" during the final trading session of the week.

The day began "clearly up," he said, on news of the European agreement.

"That was generally viewed as positive," he noted.

But then things "kind of faded," likely as more players began to vacate their desks ahead of the holiday week.

"It probably gave up half its gains by midday, and then it gained it all back again," he said.

Still, by the end of the day, "the number of red issues increased."

Royal Bank of Scotland Group plc was one of the foreign banks that got a boost on the bailout news. The bank's preferreds ended the day mixed but leaning toward the higher side.

Away from things spurred by the bailout news, PNC Financial Services Group Inc.'s 8% enhanced trust preferreds issued by National City Capital Trust IV were trading actively as investors responded to news out late Thursday regarding a redemption of two series of trust preferreds.

Among recent issues, Entergy Louisiana LLC's new $200 million of 5.25% $25-par first mortgage bonds due July 1, 2052 were holding in, and a trader also noted that General Electric Capital Corp.'s $2.25 billion issue of 7.125% series A fixed-to-floating-rate noncumulative perpetual preferred stock "has been cranking up."

RBS more green than red

Royal Bank of Scotland's preferreds were mostly firm Friday as investors reacted to news of the planned help for Spanish and Italian banks.

In the RBS complex, the 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) were up a dime at $19.65, and the 6.6% series S noncumulative dollar preference shares (NYSE: RBSPS) gained 8 cents, closing at $17.73.

The 6.75% series Q noncumulative dollar preference share (NYSE: RBSPQ), however, fell 2 cents to $18.02.

On Friday, European leaders agreed to use rescue fund dollars to help out struggling banks in Spain and Italy. Additionally, the European Union agreed to intervene in bond markets to provide support for E.U. member states.

Leaders also pledged to create a single banking supervisor for banks within the euro zone. The move was seen as a step toward creating a more centralized banking system for the union.

However, few details on how each measure will occur were released.

PNC preferreds slip

PNC Financial's recently called 8% enhanced trust preferreds (NYSE: NCCPC) were trading down 5 cents at the market's close at $25.23.

The Pittsburgh-based company announced after the bell on Thursday that it called two series of its trust preferreds: the 7.75% trust preferreds issued by PNC Capital Trust E (NYSE: PNH) and the 8% enhanced trust preferreds.

The redemption will occur July 30 and is being funded with available cash. PNC said it was launching the redemption by way of a "capital treatment event," referring to the Federal Reserve's new proposed rules on how regulatory capital will be classified.

Entergy bounces around

Entergy Louisiana's 5.25% $25-par first mortgage bonds due 2052 were trading in a $25.25 to $25.30 range at midday, according to a trader.

After the close, a market source said the notes ended the day "towards the low end of the day's range" at $25.26.

The volume-weighted average price was $25.32.

"It was pretty active," the source added.

The deal priced Tuesday and freed to trade Wednesday.

Entergy Louisiana is the Baton Rouge, La.-based energy providing subsidiary of Entergy Corp.

GE, Qwest doing well

GE Capital's 7.125% series A fixed-to-floating-rate noncumulative perpetual preferred stock continued its upward ascent, a trader said.

He saw the $100,000-par paper trading at 105 3/8 bid.

The issue priced June 7.

Among other recently priced deals, Qwest Corp.'s 7% senior notes due 2052 gained 26 cents, or 1.03%, to close at $25.60.

Qwest brought the deal June 18.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.