PartnerRe breaks from syndicate, inches toward par; recent deals weaken; Ally still pressured

By Stephanie N. Rotondo

Portland, Ore., June 9 - It was an "up-and-down" day for preferred stocks, a trader said Thursday.

"Things started out pretty painfully," he said. But as common stocks started to gain ground, so did the rest of the market, including preferreds.

PartnerRe Ltd.'s new issue of 7.25% series E cumulative redeemable preferreds - a $325 million issue that priced Wednesday - broke from syndication late in Thursday's session. Upon its release, the new preferreds traded nearer to par, according to a trader.

Meanwhile, National Bank of Greece SA's series A preferred shares again traded down as the bank's home country was making headlines yet again.

Also in the financial space, Ally Financial Inc.'s preferreds continued to lose ground, though on no news. And, Royal Bank of Scotland Group plc's preferreds turned weak after running up on Wednesday.

PartnerRe frees to trade

A trader said Pembroke, Bermuda-based PartnerRe's new 7.25% preferreds freed to trade at 2 p.m. ET.

"It was quiet in the morning, but once it freed up, it gravitated closer to par," the trader said.

He quoted the issue at $24.90 bid, $24.95 offered in the gray market.

The deal was more than double what the market was expecting. Proceeds from the sale will be used for general corporate purposes.

Also in the reinsurance realm, Endurance Specialty Holdings Ltd.'s 7.5% non-cumulative perpetual preferreds (NYSE: ENHPB) were unchanged at $24.70.

Recent deals weaken

Among other recent new issues, Qwest Corp.'s 7.375% $25-par senior notes due 2051 (NYSE: CTQ) slipped 12 cents to $24.88, while CommonWealth REIT's 7.25% series E preferreds (NYSE: CWHPE) dipped a penny to $24.72.

Greek bank sinks again

National Bank of Greece's series A preferreds (NYSE: NBGPA) fell 57 cents, or 5.11%, to $10.58.

The preferreds sunk yet again as the country of Greece was once again in headlines, as the European Union and International Monetary Fund estimated that the country could need as much as $65 billion more in loans to avoid a default.

The EU and IMF are currently considering an expanded aid package for the country, which could include a rollover of the government's debt at maturity. However, such a proposal would still be considered a credit event, according to Moody's Investors Service analyst Bart Oosterveld. A default would still occur because the rollover would not be considered truly voluntary.

Ally remains soft

Ally Financial's 8.5% series A preferreds (NYSE: ALLYPA) declined a nickel to $25.71, while the 8.125% series B preferreds (NYSE: ALLYPB) lost 15 cents to close at $25.58.

The preferreds had lost 34 cents and 42 cents, respectively, in the previous session, which was more than three times the market average. There has been no news out on the Detroit-based bank to act as catalyst.

RBS ends mixed

After seeing gains in some of its issues on Wednesday, Royal Bank of Scotland closed weaker to steady on Thursday.

The series G preferreds (NYSE: RBSPG) fell 51 cents to $15.65, and the S series preferreds (NYSE: RBSPS) were unchanged at $18.00.

On Wednesday, the United Kingdom's banking regulator said it was considering altering the rules to allow banks to repay its government-basked debt early, thereby lessening their dependence on taxpayer money.

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