PNC Financial sells $1,000-par issue; CYS, Teekay admitted to NYSE; Ally up post-earnings

By Stephanie N. Rotondo

Phoenix, May 2 - After a quiet couple of days in the primary market, new preferred stock issues started to kick out again on Thursday.

PNC Financial Services Group Inc. announced plans to sell at least $500 million of $1,000-par series R fixed-to-floating rate noncumulative perpetual preferreds.

Price talk is around 4.9%, a trader said.

Meanwhile, Gamco Global Gold, Natural Resources & Income Trust by Gabelli said it would sell series B cumulative preferreds, with price talk around 5.125%.

"It'll be a small deal," a trader said, "probably 4 to 5 million shares."

The trader said the preferreds were already at par in the gray market at midday.

No pricing details had emerged as of 6:30 p.m. ET.

In the secondary, Ally Financial Inc.'s preferreds were on the rise just one day after the company reported quarterly earnings. Royal Bank of Scotland Group plc was also firming ahead of its own release on Friday.

PNC prices $1,000-pars

PNC Financial Services announced and priced a $500 million issue of 4.85% series R fixed-to-floating rate noncumulative perpetual preferreds on Thursday.

Initial price talk was 4.9%. The dividend will begin floating on June 1, 2023 at Libor plus 304 basis points.

At midday, the issue was quoted at 99.75 bid, 100.5 offered in the gray market. After the bell, a trader pegged the deal at 100.5 bid, 100.625 offered.

Proceeds will be used for general corporate purposes, which may include advances to subsidiaries, paying down debt and repurchases or redemptions of outstanding securities.

The trader also said he heard that PNC is planning a $25-par deal, but details on that have not yet been published.

PNC Financial is a Pittsburgh-based financial services company.

CYS, Teekay list

In new listings, CYS Investments Inc.'s $200 million of 7.5% series B cumulative redeemable preferreds hit the New York Stock Exchange under the ticker symbol "CYSPB." Paper was trading at $24.80 at midday, down a dime from the open.

The issue ended at $24.90, unchanged.

The deal priced April 23.

Teekay Offshore Partners LP's $150 million of 7.25% series A cumulative redeemable preferreds also listed on the NYSE. The ticker symbol is "TOOPA."

The preferreds were trading at $25.49 at midday, versus opening levels of $25.05. The closing price was $25.66.

That issue also came April 23.

Ally on the rise

Ally Financial's preferreds were busy and better just one day after the company reported earnings.

The 8.125% series 2 fixed-to-floating rate trust preferreds (NYSE: ALLYPA) gained 11 cents, closing at $27.50. The 8.5% series A fixed-to-floating rate perpetual preferreds (NYSE: ALLYPB) gained 9 cents, ending at $26.86.

On Wednesday, Ally reported a profit of $1.1 billion, due in part to a $900 million gain from a sale of the company's Canadian unit.

The company also said that it remains focused on repaying the U.S. Department of Treasury for funds it received under the Troubled Asset Relief Program. The agency is currently a 74% owner in the company, holding about $5.9 billion of 9% mandatorily convertible preferreds.

Additionally, Ally said it is prepared to fight a battle with Residential Capital LLC creditors who are claiming that former parent Ally stripped the offspring of assets.

In March, the Federal Reserve objected to a capital plan submitted by the company due to its inclusion of liabilities associated with bankrupt ResCap. Ally is in talks to resubmit a plan to the central bank.

RBS earnings to come

Royal Bank of Scotland's preferreds were trading firmly ahead of the Edinburgh-based bank's earnings release on Friday.

The 6.08% noncumulative guaranteed trust preferreds (NYSE: RBSPG) earned 18 cents, closing at $22.63, while the 6.6% series S noncumulative dollar preference shares (NYSE: RBSPS) rose 17 cents to $24.20.

The 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) ended at $25.33, up 11 cents.

A survey of analysts done by Bloomberg indicated that expectations are that RBS will post its first quarterly profit since 2011. The profit is expected to be about £356 million, which compares to a loss of £1.5 billion the year before.

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