PNC Financial's new 4.85% $1,000-par preferred stock performs well; Saratoga, Gamco price

By Stephanie N. Rotondo

Phoenix, May 3 - PNC Financial Services Group Inc.'s new $500 million issue of 4.85% series R fixed-to-floating rate perpetual preferreds - a deal that priced Thursday - was doing quite well in the preferred market on Friday.

"That thing was amazing," a trader said. "We've breached the 4-handle on regional banks' perpetual stuff."

Meanwhile, two issues were priced early in the day. Saratoga Investment Corp. sold $42 million of 7.5% fixed-rate senior notes due 2020, a deal that was upsized from $40.25 million.

A trader said he saw the notes at $24.70 bid early in the day.

Gamco Global Gold, Natural Resources & Income Trust by Gabelli also came with a deal, a $100 million offering of 5% series B cumulative preferreds.

The notes had already freed from the syndicate by midday.

In the secondary, Royal Bank of Scotland Group plc's preferreds were strong following the bank's earnings announcement, in which it showed a swing to profit.

PNC's $1,000-pars doing well

PNC's new 4.85% series R fixed-to-floating rate noncumulative preferreds were heading over par in Friday trading.

A trader said the $1,000-par issue traded up to 100.375 on Thursday. Paper got as good as 101 bid, 101.5 offered in early Friday trading but was around 101 bid, 101.375 offered at midday.

A market source said the issue closed at 101.25 bid, 101.375 offered.

Beginning June 1, 2023, the dividend will begin floating at Libor plus 304 basis points.

The Pittsburgh-based financial services company will use the proceeds for general corporate purposes, which may include advances to subsidiaries, paying down debt and repurchases or redemptions of outstanding securities.

Gamco prices, moves above par

Gamco Global Gold priced $100 million of 5% series B cumulative preferreds on Friday.

That issue was trading "above par," a trader said at midday.

The Rye, N.Y.-based non-diversified, closed-end management investment company said it will use the funds raised in the offering to redeem $48.89 million of outstanding 6.625% series A cumulative preferreds.

The As (NYSE: GGNPA) were up a penny at $25.40.

BB&T lists on NYSE

In new listings, BB&T Corp.'s $450 million of 5.2% series G noncumulative perpetual preferred stock listed on the New York Stock Exchange under the ticker symbol "BBTPG."

Paper was trading at $24.99 at midday, up 9 cents from the previous close.

The issue priced April 24.

RBS swings to profit

Royal Bank of Scotland posted its first profit since 2011 on Friday. The Edinburgh-based bank's preferreds were strong as a result.

The 6.6% series S noncumulative dollar preference shares (NYSE: RBSPS) were up 8 cents at $24.27. The 6.35% series N noncumulative dollar preference shares (NYSE: RBSPN) gained 9 cents, closing at $23.60.

And, the 6.08% noncumulative guaranteed trust preferreds (NYSE: RBSPG) put on 29 cents, or 1.28%, ending at $22.92.

For the first quarter, RBS reported a profit of £393 million, which compared to a loss of £1.5 billion the year before.

The quarter's bottom line was buoyed by a £249 million one-off gain on the value of its own debt.

The U.K. government holds an 81% stake in the bank and talks have been on-and-off in regards to how the country's taxpayers might recoup their money. RBS has been whittling itself down to become a leaner, meaner machine, selling any assets that were not considered essential or profitable.

As such, management said it hoped its overhaul would be complete by 2014, allowing the government to begin selling off its shares.

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