Preferreds give up early gains; Wintrust prices new issue; AmTrust lists; RBS declines

By Stephanie N. Rotondo

Phoenix, June 22 – The preferred stock market was initially higher on Monday but came in with the Treasury market by the end of the day.

Still, the preferred space was “outperforming Treasuries dramatically,” a market source remarked.

The day’s movement was attributed to reports that a deal between Greece and its creditors was emerging after weeks of back and forth negotiations. However, E.U. leaders warned that a deal might not be inked on Monday.

The Wells Fargo Hybrid and Preferred Securities index ended down 10 basis points. The index was up 4 bps at mid-morning.

By comparison, a market source said five-year Treasuries were down half a point, or 50 bps, while the 10-year notes were off a full point.

The week’s calendar kicked off with a new issue announced by Wintrust Financial Corp., an offering of series D fixed-to-floating rate noncumulative perpetual preferreds.

The deal came at 6.5% – at the tight end of the 6.5% to 6.625% price talk – with $125 million shares being sold.

The deal priced via Incapital LLC and U.S. Bancorp Investments Inc.

“There’s not much happening in the gray,” a trader noted early in the day, adding that many deals from Incapital tend to be done “almost like a best-efforts deal.”

He saw a $24.60 bid in the early gray market, but no trades.

Later in the day, another source said he thought the deal was “doing pretty well,” placing it around $24.80.

Dividends will be fixed and payable on the 15th day of January, April, July and October through July 15, 2025. On that date, the issue will begin to float at Libor plus 406 basis points and will continue to be paid on the same dates.

The Rosemont, Ill.-based company will use proceeds for general corporate purposes, which may include investment at the holding company level, providing capital to support growth, acquisitions or other business combinations and reducing or refinancing existing debt.

Meanwhile, AmTrust Financial Services Inc.’s 7.25% $25-par junior subordinated notes due June 15, 2055 – a $150 million deal priced June 11 – listed on the New York Stock Exchange on Monday.

The ticker symbol is “AFSS.”

Paper was trading at $24.82 at mid-morning – down from opening levels of $24.85 – but closed higher at $24.87.

RBS drifts down

Royal Bank of Scotland Group plc’s preferreds were getting knocked around on Monday, just one day ahead of the Edinburgh, Scotland-based bank’s annual shareholders meeting.

The 6.08% noncumulative guaranteed trust preferred securities (NYSE: RBSPG) declined 20 cents to $25.02, as the 6.6% series S noncumulative dollar preference shares (NYSE: RBSPS) dropped 24 cents to $25.05.

At the meeting on Tuesday, shareholders will be asked to approve – among other things – paying associated costs and fees tied to the U.K. government’s plan to sell off its majority stake in the bank.

Shareholders are not expected to take that motion well.

Additionally, the company might also be plagued with questions about yet another IT malfunction that resulted in many RBS customers not receiving electronic deposits on time.

The glitch occurred early last week.

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