RBS experiences sell-off; National Bank of Greece takes hit; no dividends for First BanCorp

By Stephanie N. Rotondo

Portland, Ore., July 6 - Trading in preferred stocks continued to be "frustrating," as one trader put it Wednesday, as many players were still out for vacations.

"Lots of people take this week off," a trader explained.

Still, the lack of people in their desks did not stop investors from selling Royal Bank of Scotland Group plc preferreds. A trader said the stock was "getting hit hard," though there was no real news to act as catalyst. Trading in the name was heavy, however, even beating the usually dominant Ally Financial Inc.

Meanwhile, National Bank of Greece SA's preferreds lost over 10% of their value during the day. The losses came as Greek banks said they would favor a rollover of the country's sovereign debt at a meeting in Paris.

First BanCorp preferreds saw practically no trading on Wednesday, just a week after the company announced a financing plan that would eventually allow it to pay back bailout funding from the U.S. Treasury. But Prospect News was able to find out if the bank plans to reinstate dividends in the near term.

RBS preferreds decline

Royal Bank of Scotland's preferreds were "selling off," a trader said, though he added that there was "no real news" to cause the dip.

He said that Moody's Investors Service's recent downgrade of Portugal's sovereign debt might have played a role.

"It could be that RBS had some exposure, but it wouldn't really warrant this sell-off," he said. "It's probably somebody selling off a position."

Another trader said RBS paper "has been getting hit hard" in part because of "consistent sellers."

In fact, the United Kingdom-based bank's series G preferreds (NYSE: RBSPG) stole the proverbial show, beating Ally Financial's two series of preferreds as the most active security of the day.

About 2.02 million of the series G preferreds changed hands, falling 38 cents to $14.04.

Of the remaining RBS issues, the series Es (NYSE: RBSPE) were the next busiest, with just over 612,000 trading. The preferreds fell 42 cents to $14.04.

The I series capital trust VI preferreds (NYSE: RBSPI) meantime lost 17 cents to close at $14.07. About 235,400 preferreds traded.

Greek bank plummets again

National Bank of Greece's 9% series A preferreds (NYSE: NBGPA) were unusually active as Greek banks came out in support of a debt rollover plan.

But while the preferreds were active, they were also more than 10% weaker.

The preferreds fell 95 cents, or 11.18%, to $7.55. Volume was nearly 450,000 preferreds.

Vassilis Rapanos, head of the Greek banking association as well as the chairman of National Bank of Greece, seemed positive when giving a statement at a meeting in Paris, Reuters reported.

"We will support the state in the giant effort to save the country and put it on a growth path," Rapanos said. "I believe that negotiations currently under way will have a positive outcome."

No dividend for First BanCorp

Last week, Puerto Rico's First BanCorp announced that it had secured a $175.5 million investment from two funds managed by Oaktree Capital Management, a move aimed at increasing the company's capital ratios.

The investment followed a similar deal with Thomas H. Lee Partners in May.

The bank is attempting to raise about $500 million, which would force the conversion of the U.S. Treasury's preferred stock stake into common shares. The recent financing plan - which also includes a rights offering for current stockholders - could put the company on firmer footing, which led some market players to wonder if the preferred dividends would soon be reinstated.

"As of today, there is no plan [to reinstate the dividend]," Sara Alvarez, vice president of corporate affairs, told Prospect News on Wednesday.

She also noted that in order to begin paying the dividend, the Federal Reserve must give the bank approval first.

"They'll clean the bank up to be sold," speculated one trader. "If they can stay afloat, those preferreds should be good."

There was little trading in the preferreds during the midweek session. All of the issues are currently trading with a $17 handle.

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