U.S. Bancorp's new preferreds list; Aegon, Ares end softer; Dominion Resources active, higher

By Stephanie N. Rotondo

Portland, Ore., Jan. 27 - The preferred stock market finished Friday a bit higher than it had closed Thursday, a market source reported.

Still, volume was "quite light," he said.

The subdued volume came as Fitch Ratings downgraded several European countries. Additionally, investors were sitting on the sidelines, waiting to hear what the European Union would do for Greece.

U.S. Bancorp's recent 6.5% fixed-to-floating preferreds officially listed on the New York Stock Exchange. Upon listing, the preferreds traded into higher territory.

Other new issues, such as those from Ares Capital Corp. and Aegon NV, were a bit weaker on the day.

Away from recent new issues, Dominion Resources Inc.'s preferreds were on the rise despite a decline in quarterly earnings.

First Republic Bank Corp. meantime announced that its subsidiary, First Republic Preferred Capital Corp., called all of its 10.5% series A preferreds. The news helped the bank's preferreds gain a bit of ground.

U.S. Bancorp lists

U.S. Bancorp's 6.5% fixed-to-floating-rate series F noncumulative perpetual preferreds officially listed on the NYSE Friday, as was expected.

The ticker symbol is "USBPM." The preferreds gained 7 cents, closing at $25.57.

The Minneapolis-based bank priced the $1.08 billion issue on Jan. 18. Proceeds will be used for general corporate purposes, including the redemption of certain callable trust preferreds.

Aegon, Ares falter

Among other recent deals, Aegon's $500 million issue of 8% $25-par notes - "that little piggy," one market source called it - ended a bit weaker with a volume-weighted average price of $24.66.

"Some of the trades were above par," the source said. Most of the day, the preferreds were trading in a range of $24.60 to $24.70.

Though the deal has yet to list on any exchange, more than 600,000 of the preferreds turned over, the source said.

Also, Ares Capital's $125 million of 7% $25-par senior notes due 2022, which priced Thursday, were falling.

A source placed the notes at $24.53 in the gray market. Shortly before the close, a trader had pegged the deal at $24.60.

Dominion up despite numbers

Dominion Resources' 8.375% 2009 series A enhanced junior subordinated notes due 2079 (NYSE: DRU) traded up 2 cents to $29.06 in moderately active trading.

The gains came even as the company reported disappointing results for the fourth quarter.

The Richmond, Va.-based energy company reported a 33% decline in its fourth-quarter earnings, which came to $201 million, or 35 cents per share.

That compared with $298 million, or 51 cents per share, the year before.

The company attributed the dip to continued weakness in its merchant generation business, which saw profits sink 42%.

Dominion also gave guidance for the first quarter of 2012. The company expects to see earnings of 85 cents to $1.00 per share.

Among other energy producers, Alabama Power Co.'s 6.45% noncumulative preference stock (OTCBB: ALBMP) fell 40 cents, or 1.44%, to $27.42.

First Republic up on call

First Republic Bank's 6.7% series A noncumulative perpetual preferreds (NYSE: FRCPA) rose 6 cents to $24.99 following word that its subsidiary called an issue of $1,000-par preferreds.

First Republic Preferred Capital said in a regulatory filing Friday that it will redeem all outstanding shares of its 10.5% noncumulative series A preferred stock on Feb. 28.

The redemption price per share will be $1,000 plus a $21 premium plus accrued dividends to the redemption date.

The bank is based in San Francisco.

First Niagara hits a high

A market source said First Niagara Financial Group Inc.'s 8.625% fixed-to-floating-rate series B noncumulative perpetual preferred stock "has done really well" since hitting the market on Dec. 7.

The issue "hit its all-time high" Friday, according to the source, though levels eventually eased a bit. The preferreds closed at $26.81, up 9 cents.

The day's high was $27.11.

The Buffalo-based financial services company issued $350 million of the preferreds in December. Proceeds were used to fund its acquisition of branches of HSBC Bank USA, NA.

© 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.