Preferreds firm; Scorpio Bulkers sells $25-par notes; Morgan Stanley gets temporary symbol

By Stephanie N. Rotondo

Phoenix, Sept. 15 – After spending the bulk of the previous week under pressure, the preferred stock market started Monday’s session strong.

But things seemed a bit volatile during the day, at least according to the Wells Fargo Hybrid and Preferred Securities index.

The index ended the day up 5 basis points, but it was up 11 bps at mid-morning.

However, a trader remarked that trading was subdued, speculating that an upcoming vote on Scotland’s independence might be the culprit.

“I think people are waiting on the Scottish vote to see how it will affect the market,” he said.

The vote takes place Thursday.

Scorpio Bulkers Inc. priced $65 million of 7.5% $25-par senior notes due 2019 on Monday. The Monaco-based shipping company had originally registered the deal on Aug. 11. At that time, only $35 million of the notes were expected to sell.

On Thursday, the company upsized the offering to $60 million. The size was then lifted again upon pricing.

Price talk was 7.5% to 7.625%.

Stifel Nicolaus & Co. Inc., Deutsche Bank Securities Inc. and Jefferies LLC ran the books.

Among recently priced deals, Morgan Stanley & Co. Inc.’s $1 billion of 6.375% series I fixed-to-floating rate noncumulative preferreds were assigned a temporary trading symbol on Monday, according to a market source.

The symbol is “MSQVP.”

Early in the day, the preferreds were holding north of par, according to a trader.

The trader quoted the issue at par bid, $25.05 offered.

But by the end of business, the issue had fallen to $24.97 versus a par opening level.

The deal came via Morgan Stanley & Co. LLC on Thursday.

The issue begins to float on Oct. 15, 2024 at Libor plus 370.8 bps.

RBS weakens ahead of vote

Royal Bank of Scotland Group plc’s preferreds were mostly lower in Monday trading ahead of a Thursday vote that will decide whether Scotland splits from the United Kingdom.

For its part, the Edinburgh-based bank said it will move to England should the vote favor independence.

The 5.9% noncumulative guaranteed trust preferred securities (NYSE: RBSPE) were the most actively traded of the RBS structure, and it was one of few issues that managed to finish with a positive tone.

The securities closed at $23.67, up 4 cents.

However, the 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) ended down 13 cents at $24.87.

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