Morning Commentary: AmTrust gets temporary symbol; new $1,000-par issues trading around par

By Stephanie N. Rotondo

Phoenix, March 16 – The preferred stock market was firm as Monday’s session got underway, helping a new issue from AmTrust Financial Services Inc. gain traction.

The Wells Fargo Hybrid and Preferred Securities index was up 10 basis points at mid-morning.

The $165 million offering of 7.5% $25-par series D noncumulative preferreds – priced Thursday and freed early Friday – were seen jumping about 20 cents in early trades to a $24.80 to $24.85 context.

A trader also noted that the new issue was assigned a temporary trading symbol, “AMSVP.”

Among other recent deals in the $1,000-par space, Citigroup Inc.’s $1.5 billion of 5.875% series O fixed-to-floating rate noncumulative preferreds – a deal from Friday – were trading “right around par,” according to a trader. Bank of America Corp.’s $1.9 billion offering of 6.1% $1,000-par series AA fixed-to-floating rate noncumulative preferred stock were placed at 100.125, while Morgan Stanley & Co. Inc.’s $1.5 billion of 5.5% series J fixed-to-floating rate noncumulative preferreds were at 100.5.

Both BofA and Morgan Stanley came Thursday.

As for the coming pipeline, a trader said he had not seen any new deals early Monday but said that he “assumed we will probably get another deal coming tomorrow.”

Meanwhile, Vanguard Natural Resources LLC said late Friday that it had entered into an equity distribution agreement to sell up to $50 million of its 7.875% series A cumulative redeemable perpetual preferred units (Nasdaq: VNRAP), up to $100 million of its 7.625% series B cumulative redeemable perpetual preferred units (Nasdaq: VNRBP) and up to $75 million of its 7.75% series C cumulative redeemable perpetual preferred units (Nasdaq: VNRCP).

Additionally, the company will also sell up to $400 million of its common units (Nasdaq: VNP).

Credit Suisse Securities (USA) LLC, UBS Securities LLC, BMO Capital Markets, BB&T Capital Markets, SunTrust Robinson Humphrey Inc. and MLV & Co. LLC are the sales agents.

“I like what I see,” a trader said, noting that the “at-the-market” offering was a “great idea.”

“If they can bring preferreds at comp market levels, that’s cheaper than bringing common at this point,” the trader said.

He also noted that the preferreds were currently trading “rich” compared to senior debt and that he “would be a seller at this point.”

Following Friday’s announcement, the oil and gas company’s preferred units were trading off.

The series As were down $1.04, or 4.47%, at $22.23 at mid-morning. The Bs were 46 cents, or 2.18%, lower at $20.65 and the Cs had dipped 71 cents, or 3.18%, to $21.61.

© 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.