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Morning Commentary: AmTrust Financial to bring new preferred shares; recent deals in focus
By Stephanie N. Rotondo
Seattle, March 8 – Yet another new issue hit the primary preferred stock calendar on Tuesday as AmTrust Financial Services Inc. announced plans to sell at least $75 million of series E noncumulative perpetual preferred stock.
Price talk is 7.75% to 7.875%, according to one market source.
A trader saw the issue at $24.65 bid, $24.70 offered in the early gray market.
“That should pick up,” he said.
Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners. Keefe Bruyette & Woods Inc. is joint lead manager, and RBC Capital Markets LLC, William Blair & Co., JMP Securities LLC and Compass Point are the co-managers.
From Monday’s business, Legg Mason Inc.’s $250 million of 6.375% $25-par junior subordinated notes due 2056 were pegged at $24.78 bid, $24.85 offered.
That deal was upsized from $150 million and came tighter than the 6.5% to 6.625% initial price talk.
As for deals priced last week, BB&T Corp.’s $425 million of 5.625% series H noncumulative perpetual preferreds – a deal priced Wednesday – were quoted at $24.75 bid, $24.77 offered.
Southern California Edison Co.’s SCE Trust V’s $300 million of 5.45% fixed-to-floating rate trust preference securities – a deal from March 1 –were seen at $25.50 bid, $25.57 offered.
And, Charles Schwab Corp.’s $750 million of 5.95% series D noncumulative perpetual preferreds were trading at $25.06 bid, $25.10 offered.
That was the last deal of February, pricing on Leap Day.
“There’s a lot of these $25-par issues that retail needs to absorb,” a trader said. “All of these markets are pretty wide, which means” investors are hesitating. “They’re just sitting on the sidelines figuring out what to do.”
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