Validus Holdings prices upsized new issue; more deals eyed; reform push helps GSE paper

By Stephanie N. Rotondo

Seattle, June 6 – More deals were coming out of the primary preferred stock market on Monday as Validus Holdings Ltd. priced $150 million of series A noncumulative preference shares.

In addition to the Validus offering, a trader said he was hearing of at least two more deals for the week.

Shortly before the close, the Bermuda-based reinsurance company priced the deal, selling $150 million of the preference shares at par to yield 5.875%.

Price talk on the Validus deal was 6% to 6.125%, according to a market source.

A trader said the issue was bid for at $24.70 in the early gray market. Post-pricing, the bid was $24.95, a second market source said.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and UBS Securities LLC ran the books.

The Wells Fargo Hybrid and Preferred Securities index closed down 31 basis points. The index was off 16 bps at mid-morning.

Meanwhile, Fannie Mae and Freddie Mac preferreds remained on an upward trajectory on Monday as recent developments in GSE-linked lawsuits have spurred both sides of the Congressional aisle to renew calls for GSE reform.

Nearly 3 million of Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) traded, rising 4 cents to $4.76. Over 1.8 million of Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) changed hands, gaining a nickel, or 1.09%, to $4.65.

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