Citigroup prices $1,000-par preferreds; Global Indemnity sells $25-par notes; RBS lower

By Stephanie N. Rotondo

Phoenix, Aug. 5 – The preferred stock primary market showed some strength in Wednesday activity.

Citigroup Inc. brought $1.25 billion of 5.95% $1,000-par series Q fixed-to-floating rate noncumulative preferreds, a market source reported.

The issue had been talked in a 6.125% area.

Citigroup Global Markets Inc. was the bookrunner.

A trader quoted the issue at 99.875 bid, par offered.

Dividends will be fixed and payable semiannually through August 2020. After that date, the dividend floats at Libor plus 409.5 basis points and will be payable quarterly.

Meanwhile, Global Indemnity plc priced $100 million of 7.75% $25-par subordinated notes due 2045.

That deal was talked in the 7.75% area.

Morgan Stanley & Co. LLC and UBS Securities LLC are running the books.

Among recent deals, the Charles Schwab Corp.’s $600 million of 6% series C noncumulative preferreds – a deal priced July 27 – began trading on the New York Stock Exchange, as was expected.

The preferreds were the most actively traded security of the day, rising a nickel to $25.25.

Royal Bank of Scotland Group plc’s preferreds were coming in as the Edinburgh, Scotland-based bank priced $3.15 billion of perpetual subordinated tier 1 notes in two parts.

“I think it was a combination of people expecting more calls and people lightening up exposure,” a source said. He added that some investors might have been swapping out the older preferreds for the “cheaper” new issues.

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