Preferred market muted during holiday trading; Italian austerity measures help RBS issues gain

By Stephanie N. Rotondo

Portland, Ore., Nov. 11 - Despite muted volumes due to Veterans Day, preferred stocks were on the rise on Friday as Italy approved an economic reform bill.

"It seems like they are making all the correct directional moves they are supposed to," a trader said, noting that the country was expected to appoint a new prime minister as early as Saturday.

The trader also opined that the country's efforts, which seem to have boosted investor optimism, given the 200-plus gains in the straight equity markets, was what was helping Royal Bank of Scotland Group plc paper drive higher.

In the new issue realm, KKR Financial Holdings LLC's recent 8.375% senior notes deal was hanging in there, though the trader noted that he saw only bids for the paper.

RBS boosted by Italy news

Italy's efforts to improve its financial situation were given credit for gains in Royal Bank of Scotland paper on Friday.

Most issues were up 70 cents or more on the day.

The 6.08% noncumulative guaranteed rust preferreds (NYSE: RBSPG) gained 74 cents, or 7.21%, closing at $11.01 each. The 5.9% noncumulative guaranteed trust preferreds (NYSE: RBSPE) moved up 83 cents, or 8.12%, to $11.05 apiece.

The 5.75% series L noncumulative dollar preference shares (NYSE: RBSPL) had the biggest percentage gain, climbing up 92 cents, or 9.15, to $11.03 per share.

RBS is a U.K.-based bank. The company is majority owned by the U.K. government.

KKR hangs in

KKR Financial's $225 million issue of 8.375% $25-par senior notes due 2041 was pegged at $24.85 bid by a trader.

However, he said that there were few offers for the notes, given that many desks were empty due to the holiday.

The New York-based investment firm priced the issue late Monday.

Among other recent deals, CubeSmart said late Thursday that it had fully exercised its greenshoe, selling an additional 300,000 preferreds.

All told, the Wayne, Pa.-based real estate investment trust issued 3.1 million of the 7.75% series A cumulative redeemable preferreds. The deal priced on Oct. 28.

A trader placed the issue at $24.70.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.