RBS up big on dividend, bailout payback news; BB&T lists on NYSE, Prospect Capital to follow

By Stephanie N. Rotondo

Portland, Ore., May 4 - Preferred stocks ended the week with a firm tone, helped in part by news from Royal Bank of Scotland Group plc.

Despite reporting a wider earnings loss during the session, the Edinburgh-based bank confirmed that it had made a payment to the U.K. government. A trader said that the payment did not repay in full the bailout funds received during the height of the financial crisis, but is was "enough to allow the bank to start paying dividends."

In recent deals, BB&T Corp.'s 5.85% series D noncumulative preferred stock officially listed on the New York Stock Exchange and continued to trade upward. A trader also noted that Prospect Capital Corp.'s 6.95% $25-par notes due 2022 will list soon.

PS Business Parks Inc.'s new 6% series T cumulative perpetual preferreds were "doing well," a trader said. Another trader said the deal freed from the syndicate Friday morning.

RBS pops on dividend news

News of renewed dividend payouts and a government bailout-fund payback helped give Royal Bank of Scotland preferreds a sizable boost on Friday.

The gains came even as the bank reported a wider net loss for the quarter.

The entire preferred structure was up, with some issues gaining as much as nearly 10%. The 5.9% noncumulative guaranteed trust preferreds (NYSE: RBSPE) rose 73 cents, or 5.06%, to $15.16, while the 6.08% noncumulative guaranteed trust preferreds (NYSE: RBSPG) moved up 75 cents, or 5.19%, to $15.20.

The 6.25% series P noncumulative dollar preference shares (NYSE: RBSPP) jumped $1.57, or 9.37%, to $18.33, and the 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) gained 98 cents, or 5.07%, to end at $20.30.

RBS said that it repaid $265 billion back to the U.K. government on Friday. Though the company still has some funds left to pay back, the amount was enough to allow it to begin paying dividends on its preference shares once again.

Additionally, the bailout-fund payback lessened chatter of an immediate sale of the government's stake in the bank.

RBS' quarterly earnings were less than stellar. For the first quarter, net loss was wider at £1.52 billion. Revenues were down as well at £7.13 billion.

The increased loss was blamed largely on an accounting charge.

BB&T deal hits NYSE

BB&T's $500 million issue of 5.85% series D noncumulative perpetual preferred stock listed on the NYSE Friday.

The ticker symbol is "BBTPD." The securities traded up 3 cents to $25.05.

The deal originally priced April 26.

Proceeds from the new issue will be used for general corporate purposes. These may include potential acquisitions, stock repurchases, the repayment and/or refinancing of debt obligations, which may include the redemption of trust preferreds, and extending credit to or funding investments in BB&T subsidiaries.

BB&T is a Winston-Salem, N.C.-based financial holding company.

Prospect Capital to list soon

A trader said Prospect Capital's $100 million issue of 6.95% $25-par senior notes due Nov. 15, 2022 - an issue that priced April 24 - will list during the week ahead.

He saw the paper trading at par, noting that he gave the issue a "strong buy" recommendation.

Prospect Capital is a New York-based financial services company that primarily lends to and invests in middle-market privately held companies.

PS Business frees

PS Business Parks' $350 million offering of 6% series T cumulative perpetual preferred stock freed to trade Friday, according to a trader. The deal priced Thursday.

Traders saw the preferreds trading around $24.90 in the gray market.

The company will apply to list the preferreds on the NYSE under the ticker symbol "PSBPT." Settlement is expected May 14.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunners. Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc. and RBC Capital Markets LLC are the co-managers.

Proceeds will be used for general corporate purposes, including the repayment of outstanding debt, the redemption of preferreds and the acquisition of commercial properties.

PS Business Parks is a Glendale, Calif.-based real estate investment trust.

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