Hartford Financial issue eases with market; Aspen frees to trade, holds steady; RBS declines

By Stephanie N. Rotondo

Portland, Ore., April 4 - Preferred stocks were easing Wednesday as the rest of the marketplace hit the skids.

Even Hartford Financial Services Group, Inc.'s recently priced issue of 7.875% fixed-to-floating $25-par junior debentures due 2042 came in, a trader said.

However, Aspen Insurance Holdings Ltd.'s $150 million of 7.25% $25-par perpetual noncumulative preference shares - which priced late Tuesday - freed to trade, the trader said, and were holding steady.

In secondary dealings, Royal Bank of Scotland Group plc paper gave back some of its recent gains. The preferreds had moved higher in the previous two sessions after a news report out over the weekend opined that the bank would soon turn dividends back on.

"I guess there's some doubts that's going to happen," a trader said.

Hartford softens with market

Hartford Financial Services Group's offering of $600 million 7.875% fixed-to-floating rate $25-par junior subordinated debentures due April 15, 2042 "pulled back a little bit," a trader said Wednesday. The deal priced Tuesday.

When the deal was first announced Monday, it was expected that the company would issue $500 million of notes. Ahead of pricing, the paper was already trading at par or above. After pricing and freeing to trade, the notes were going "gangbusters," a source reported Tuesday.

But as the rest of the market fell on Wednesday, so did the new issue.

A trader pegged the paper at $25.50 in the gray market.

The interest rate will be fixed until April 15, 2022. It will then be Libor plus 559.6 basis points. The floating rate will be reset quarterly.

Hartford will apply to list the notes on the New York Stock Exchange. Settlement is expected Thursday.

Citigroup Global Markets Inc. and Goldman Sachs & Co. are the joint structuring advisers and bookrunning managers. Bank of America Merrill Lynch, Barclays Capital Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are also acting as joint bookrunners. Credit Suisse Securities (USA) LLC, UBS Securities LLC, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC are senior co-managers. BB&T Capital Markets, BNY Mellon Capital Markets, LLC, Lloyds Securities Inc., PNC Capital Markets LLC, RBS Securities Inc., SMBC Nikko Capital Markets Ltd. and Williams Capital Group, LP are junior co-managers.

Proceeds from the sale will be used toward a planned repurchase of 10% fixed-to-floating rate junior subordinated debentures due 2068.

Hartford Financial is an insurance and financial services company based in Hartford, Conn.

Aspen holds in, frees

Aspen Insurance Holdings priced a $150 million issue of 7.25% $25-par perpetual noncumulative preference shares late Tuesday.

Price talk was 7.25% to 7.75%, and the issue size was originally expected to be $100 million.

A trader said the deal freed from the syndicate, seeing it trading at $24.80 in the gray market.

Aspen Insurance will apply to list the preference shares on the New York Stock Exchange under the ticker symbol "AHLPB." Settlement is expected April 11.

Citigroup, Barclays, UBS and Wells Fargo are the joint bookrunning managers. BNY Mellon, Credit Agricole Securities (USA) Inc., Deutsche Bank, HSBC Securities (USA) Inc. and U.S. Bancorp are co-managers.

Proceeds will be used for general corporate purposes, including supporting insurance and reinsurance activities through operating subsidiaries, and for repurchasing ordinary shares from time to time.

Aspen Insurance is an insurance and reinsurance company based in Hamilton, Bermuda.

Recent deals fade

Among other recent deals, MFA Financial Inc.'s $100 million sale of 8% $25-par senior notes due 2042 was "not going to free until [Thursday]," a trader said.

He added that he had not seen any markets in the paper.

Meanwhile, Brandywine Realty Trust's $100 million of 6.9% series E cumulative preferreds were offered at $24.55.

And Arch Capital Group Ltd.'s $325 million issue of 6.75% series C noncumulative preference shares fell back to $25.40, according to a trader.

RBS gives up gains

Royal Bank of Scotland Group's recent run-up was halted Wednesday as the rest of the market fell back and some market players were wondering if the bank would actually begin paying dividends again.

"I guess there's some doubts that's going to happen," a trader said.

The 7.25% series T dollar preference shares (NYSE: RBSPT) were the dominant security of the day, with over 2 million shares turning over. They fell 18 cents, or nearly 1%, to $19.20.

The 6.75% series Q noncumulative dollar preference shares (NYSE: RBSPQ) meantime dropped 13 cents to $17.78, and the 6.4% series M preference shares (NYSE: RBSPM) lost 19 cents, or 1.12%, to end at $16.83.

Percentagewise, the 6.08% noncumulative guaranteed trust preferreds (NYSE: RBSPG) were the biggest losers, falling 52 cents, or 3.57%, to $14.03.

RBS is an Edinburgh-based bank that is majority owned by the U.K. government.

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