Preferred stock investors focus on week’s new deals; market closes firm; RBS ticks higher

By Stephanie N. Rotondo

Phoenix, July 31 – New issues continued to be in focus in the preferred stock market on Friday, according to a trader.

TriplePoint Venture Growth BDC Corp.’s $50 million of 6.75% $25-par notes due 2020 – a deal that came late Thursday via Keefe Bruyette & Woods Inc. and Deutsche Bank Securities Inc. – were seen offered at $24.80 early in the day.

However, a trader said he was not sure if the paper had freed to trade.

From Wednesday’s business, IberiaBank Corp.’s $75 million of 6.625% series B fixed-to-floating rate noncumulative preferreds were again quoted wide at $24.60 bid, $24.80 offered.

By the bell, the paper had risen 7 cents from the previous close, ending at $24.79.

That issue came upsized from $50 million, with BofA Merrill Lynch and UBS Securities LLC leading the deal. On Thursday, the preferreds were assigned a temporary symbol, “IBBRP.”

The Charles Schwab Corp.’s $600 million of 6% series C noncumulative perpetual preferreds meantime continued to be a fan favorite.

The preferreds priced Monday and were soon trading at or above par. In Friday trading, the issue – which was assigned the temporary symbol “CSABP” on Wednesday – was pegged at $25.12 bid, $25.25 offered.

Those preferreds closed off a penny at $25.17.

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

Going back to the previous week’s deals, JPMorgan Chase & Co.’s $1.1 billion of 6.15% series BB noncumulative preferreds – a deal priced July 22 via J.P. Morgan Securities LLC – were seen at $24.90 bid, par offered, with the notes finishing up 3 cents at par.

The paper began trading with a temporary symbol, “JMPRP,” on Monday.

Overall, the preferred stock market had a positive tone in early Friday trading.

The Wells Fargo Hybrid and Preferred Securities index closed out the week up 17 basis points.

RBS on the rise

Away from new deals, Royal Bank of Scotland Group plc remained notable, just one day after the company said it was redeeming four series of its preference shares

The Edinburgh, Scotland-based bank said Thursday that it was redeeming four series of its dollar preference shares on Sept. 1: the 6.4% series M noncumulative dollar preference shares (NYSE: RBSPM), the 6.35% series N noncumulative dollar preference shares (NYSE: RBSPN), the 6.25% series P noncumulative dollar preference shares (NYSE: RBSPP) and the 6.75% series Q noncumulative dollar preference shares (NYSE: RBSPQ).

The redemption price for all series will be par plus accrued dividends.

Trading in those four issues was halted after the announcement Thursday but kicked back up on Friday.

Of the most actively traded RBS issues, the 6.08% noncumulative guaranteed trust preferred securities (NYSE: RBSPG) were 15 cents higher at $24.95.

The series M securities meantime rose 8 cents to $25.25, nearing their redemption price of $25.275556. The Ns improved 13 cents to $25.25, which compares to the redemption price of $25.273403.

The redemption news came as the bank reported earnings.

For the second quarter, RBS saw a profit of £293 million, up from £230 million the year before.

Despite the improved profit, management warned that the bank’s turnaround efforts would continue to slug along and warned that stock dividends would likely not be turned back on until the first quarter of 2017. Ongoing litigation was also mentioned as something that could impact results for the near-term.

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