Preferreds improve; AmTrust comes with upsized sale of $25-par notes; Fannie, Freddie up

By Stephanie N. Rotondo

Phoenix, June 11 – After spending the beginning of the week with a negative tone, the preferred stock market was rebounding in Thursday trading.

The Wells Fargo Hybrid and Preferred Securities index ended 15 basis points higher for the day.

The rally came as the Commerce Department reported that retail sales gained 1.2% in May – better than the 1.1% increase predicted by economists polled by Reuters.

Additionally, April sales were revised to show a 0.2% gain. The previous reading had sales unchanged for that month.

As was expected, the primary market got a little bit of action as AmTrust Financial Services Inc. announced plans to sell $100 million of $25-par junior subordinated notes due 2055. The deal came upsized at $150 million.

Initial price talk was around 7.25%, according to a source. The issue priced at 7.25%.

Post-pricing, a trader quoted the issue at $24.60 bid, $24.70 offered.

Morgan Stanley & Co. LLC, UBS Securities LLC and Keefe Bruyette & Woods Inc. are running the books.

Fannie Mae and Freddie Mac preferreds easily dominated trading again on Thursday and also saw a rebound following the previous day’s losses.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 21 cents, or 5.5%, to $4.03 on more than 3.5 million shares trading. Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) meantime improved 20 cents, or 5.24%, to $4.02, with 8.66 million shares being exchanged.

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