TriState prices $35 million preferreds offering; AmTrust sees gains; Wells Fargo mixed

By Abigail W. Adams

Portland, Me., March 15 – The primary market priced the second new preferreds deal of the week on Thursday.

TriState Capital Holdings Inc. priced $35 million, or 1.4 million shares, of 6.75% perpetual fixed-to-floating rate series A non-cumulative preferred stock (BB+) after the market close on Thursday, according to an FWP filing with the Securities and Exchange Commission.

While the primary market was active, the secondary market in the preferreds space wavered between gains and losses but closed Thursday largely flat with trading volume continuing to be light, a market source said.

AmTrust Financial Services’ preferreds saw large gains on Thursday after a sell-off in mid-January that pushed the preferreds down between 8% to 10%. The sell-off was sparked by negative publicity after a buyout proposal was announced.

A definitive agreement for the buyout of the New York-based multinational property and casualty insurance company was entered into on March 1. However, AmTrust will transform into an intermediary holding company and AmTrust’s preferreds will remain outstanding, a market source said.

Wells Fargo & Co.’s depositary shares were active with some making gains on Thursday after a roller coaster ride in February that saw the preferreds drop after an onslaught of negative publicity and regulatory action. While most of Wells Fargo’s depositary shares were up early in the session, they ended the day mixed.

TriState’s deal

TriState priced $35 million, or 1.4 million, in 6.75% perpetual fixed-to-floating rate series A non-cumulative preferred stock (BB+) after the market close on Thursday, according to an FWP filing with the SEC.

The preferred stock will be sold as $25-par depositary shares representing 1/40th of an interest in the series A preferreds.

The preferred stock will carry a fixed dividend until April 1, 2023 when it will switch to a floating rate equal to Libor.

If Libor is less than zero, the rate will be Libor at zero plus a credit spread of 398.5 bps. The depositary shares will be listed for trade on Nasdaq under the ticker “TSC.P.”

AmTrust here to stay

The buyout of AmTrust Financial Services is official, but the insurance company’s preferred stock will remain outstanding, a market source said.

AmTrust’s series A-F preferreds saw large gains on Thursday.

AmTrust’s 6.75% series A preferred stock closed Thursday at $19.44, an increase of 39 cents or 2.09%. The preferreds were trading at $16.91 after the mid-January sell-off.

AmTrust’s 7.25% series B preferred stock closed Thursday at $19.29, an increase of 28 cents or 1.48%. The preferreds were at $17.61 mid-January.

AmTrust’s 7.625% series C preferred stock closed Thursday at $20.33, an increase of 53 cents or 2.68%. The preferreds were at $17.88 mid-January.

AmTrust’s 7.5% series D preferred stock closed Thursday at $20.56, an increase of 43 cents or 2.15%. The preferreds were at $17.67 mid-January.

AmTrust’s 7.75% series E preferred stock closed Thursday at $21.52, an increase of 40 cents or 1.87%. The preferreds were at $19.21 mid-January.

AmTrust’s 6.95% series F preferred stock closed Thursday at $19.50, an increase of 50 cents or 2.63%. The preferreds were at $17.60 mid-January.

AmTrust preferreds experienced a sell-off after the announcement of the proposed buyout in mid-January.

On March 1, AmTrust entered into a definitive agreement with Evergreen Parent LP, an entity formed by private equity funds managed by Stone Point Capital LLC, AmTrust CEO Barry Zyskind and the Karfunkel family.

Evergreen will acquire all outstanding shares not owned by Zyskind or the Karfunkels at $13.50 per share.

The deal is expected to close in the second quarter of 2018.

The buyout is structured so that AmTrust will become an intermediate holding company. The preferreds will remain outstanding with AmTrust, a market source said.

However, “the company will still have to generate earnings,” to pay the dividends, the source said.

Wells Fargo active

Several of Wells Fargo’s securities were active and improved on Thursday after a roller coaster ride in February which pushed the preferreds down.

Wells Fargo’s depositary shares representing the company’s 8% series J non-cumulative perpetual class A preferred stock closed Thursday at $25.75, an increase of 1 cent or 0.04%.

The depositary preferreds representing the company’s 6% series V non-cumulative perpetual class A preferred stock closed Thursday at $26.28, an increase of 11 cents or 0.42%.

The depositary preferreds representing the company’s 5.5% series X non-cumulative class A preferred stock traded up to $25.05, an increase of 9 cents or 0.36%.

While up early in the session, the depositary preferreds representing the company’s 5.63% series Y non-cumulative perpetual preferred stock closed Thursday at $25.21, flush with Wednesday’s close.

Wells Fargo’s series T and series Q depositary shares were also up early in the session; however, they closed the day with losses.

The depositary preferreds representing the company’s 6% series T non-cumulative perpetual class A preferred stock closed Thursday at $25.72, a decrease of 2 cents or 0.07%.

The depositary preferreds representing the company’s 5.85% series Q fixed-to-floating rate non-cumulative perpetual preferreds closed the day at $26.54, a decrease of 4 cents or 0.15%.

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