Preferred market loses ground by day’s end; AmTrust’s new notes steady; JPMorgan to list

By Stephanie N. Rotondo

Phoenix, June 12 – A preferred stock trader said the secondary market was “up marginally with the bond market rally” early Friday, though things went south by the end of the day.

A market source said “on an index basis” – referring to the Wells Fargo Hybrid and Preferred Securities index – that the market was up “roughly 2 basis points” for most of the day but that it ended up closing off 2 bps.

The rest of the markets were waning a bit as Greece remained a concern. Additionally, investors were looking ahead to next week’s Federal Open Market Committee meeting. The gathering will be the last one the central bank has prior to a potential interest rate hike in September, and the market will be searching for clues indicating the likelihood of a rate increase.

In terms of volume, the source deemed the day “pathetic.”

“Volume was probably the lowest of the week,” he said, adding that among listed and paying securities, there wasn’t a single issue that traded above 200,000 shares.

In new issues, a trader said AmTrust Financial Services Inc.’s $150 million of 7.25% $25-par junior subordinated notes due 2055 – a deal priced Thursday – would free to trade on Monday.

In early Friday trading, he saw the notes bid for at $24.60, which was unchanged from the previous day.

Another source agreed that the level was likely accurate.

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

Among other recent deals, JPMorgan Chase & Co.’s 6.1% series AA noncumulative preferreds are slated to begin trading on the New York Stock Exchange on Monday, according to a market source.

The ticker symbol will be “JPMPG.” The issue priced May 29.

By day’s end, the preferred had drifted down 2 cents to $24.62, though at mid-morning, the paper was up 5 cents at $24.69.

A total of $1.425 billion of the preferreds were sold, including $125 million of a greenshoe.

J.P. Morgan Securities LLC was the bookrunner on that deal.

MetLife amends tender

MetLife Inc. amended a tender offer for its 6.5% series B noncumulative preferreds (NYSE: METPB) on Friday, reducing the total number of shares being tendered for.

The offer – which launched June 1 and will expire June 26 at midnight ET – was originally for all 60 million outstanding shares. However, the New York-based insurance provider reduced that number to 59.85 million shares in order to avoid the issue being delisted from the NYSE.

As previously reported, holders who participate in the tender will receive par plus accrued and unpaid dividends.

Any preferreds not tendered will be called July 1 at $25.00 per share.

The issue closed the day flat at $25.04 and was the day’s most actively traded among listed and paying securities, with over 182,000 shares being exchanged.

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