Maiden's new deal astonishes trader; Gastar deal marketing; PartnerRe new issue lists on NYSE

By Stephanie N. Rotondo

Portland, Ore., June 16 - The preferred stock market remained heavy in Thursday trading despite an attempted rally by the equity markets.

"The entire market feels like crap," a trader said.

In a move that surprised some preferred players, Maiden Holdings North America Ltd. announced the sale of $75 million $25-par senior notes. A trader expressed dismay at the deal's timing given the conditions of the overall market.

The trader also reported that Gastar Exploration USA Ltd.'s recently announced deal began marketing.

Among recent new issues, PartnerRe Ltd. announced that its greenshoe was exercised in full. Traders also reported that the new 7.25% series E cumulative redeemable preferred shares officially listed on the New York Stock Exchange.

Meanwhile, Ally Financial Inc.'s preferreds continued to suffer along with the rest of the market. Volume in the 8.5% series A preferreds was quite high, as has been the case recently. A trader opined that there was a large holder or holders attempting to unwind their positions, causing the declines.

Maiden brings new issue

Maiden Holdings North America said Thursday that it plans to issue $75 million of 30-year senior $25-par bonds.

Price talk was in the 8.25% area, according to a trader, and timing was Thursday or Friday.

The deal had not priced by the market's close, and one trader was astonished the deal was coming at all.

"I don't know why they brought it," he said. "It's a shitty market. Nobody was bidding it. It's very, very bad."

Another trader said the issue was trading around $24.75 in the gray market.

"The market looks pretty weak overall," he said.

Bank of America Merrill Lynch is the bookrunner on the deal.

Maiden Holdings North America is a subsidiary of Hamilton, Bermuda-based reinsurance company Maiden Holdings Ltd.

Gastar marketing begins

Earlier in the week, Gastar Exploration USA announced a $15 million offering of 8.625% series A cumulative preferreds.

A trader said the deal began marketing on Thursday, though another trader said he still had not heard anything about the underwritten offering.

"I'm not seeing anything in this deal," the second trader said.

The Houston-based natural gas company is selling the preferred stock at a discount at $23.25.

Proceeds will be used to repay credit facility borrowings.

PartnerRe deal lists

PartnerRe's recent $325 million issue of 7.25% series E cumulative redeemable preferreds was increased to $373.75 million through the full exercise of the deal's over-allotment option, the company said Thursday.

The deal originally priced on June 8.

A trader said the preferreds officially listed on the NYSE under the symbol "PREPE."

The shares fell 19 cents to $24.76 on volume of about 435,500 shares.

PartnerRe is a Pembroke, Bermuda-based reinsurance company.

Ally pressured by selling

Ally Financial's preferreds continued to be among the most actively traded $25-par securities.

The preferreds were also heavy yet again, and a trader opined that it was due to one large seller.

"We believe there is a large holder unwinding positions, probably coming from Europe," he said.

The 8.5% series A preferreds (NYSE: ALLYPA) dropped a quarter to $24.59 on volume of 4.75 million shares.

The 8.125% series B preferreds (NYSE: ALLYPB) saw considerably less trading. They declined 44 cents to $24.38 on volume of about 584,000 shares.

"Ultimately, it will be a great buy," the trader said. "We just got to get the seller out of the way."

Ally is a Detroit-based bank.

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