Endurance issue prices, does 'very well'; trader sees upside in U.S. Cellular; RBS declines

By Stephanie N. Rotondo

Portland, Ore., May 24 - The big news of the day in the preferred stock market was a new issue from Endurance Specialty Holdings Ltd. The Bermuda-based insurance company said early on in the day that it intended to sell preferred stock and pricing came before the bell.

The deal came upsized and at the rich end of price talk originally set in the 7.625% area; the dividend was set at 7.5%.

Overall the preferred market closed "mixed" to "off slightly," according to a market source on Tuesday.

Royal Bank of Scotland Group plc's preferreds drifted lower after Moody's Investors Service said it was placing the bank - along with 14 other United Kingdom banks - on review for possible downgrade.

A market source noted that the review did not include the preferreds, but added that "it doesn't mean the preferreds didn't move in sympathy."

Endurance deal doing well

Endurance Specialty Holdings brought a $230 million issue of 7.5% non-cumulative series B perpetual preferreds on Tuesday.

The market had originally been expecting $150 million and price talk was originally in the 7.625% area. Included in the final $230 million total was the exercise in full of the $30 million greenshoe.

Ahead of pricing, a trader opined that "they should cut the [dividend] and increase the size," as the shares were trading at par even before they officially priced.

"It was doing very, very well," a trader said. "A lot of people like it."

Another source said the deal was "going quite well," seeing a $24.98 bid, $25.03 offered quote in the gray market.

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