Preferred stock sell-off continues; foreign insurers like ING take hit; RBS, U.S. banks fall

By Stephanie N. Rotondo

Portland, Ore., July 29 - Preferred stocks were down again Friday, "continuing the sell-off we've been seeing," a trader said.

"It's firmed up a bit since the morning," he added.

"It was another down day," said another market source.

"Foreign insurers were beat up a little more than others," the first trader said, seeing above-average weakness in names like ING Groep NV and Aegon NV. "Outside of that, it seems to be an equal-opportunity sell-off."

Royal Bank of Scotland Group plc was also a bit lower than other bank credits.

With U.S. and European debt concerns weighing heavily on the market, a source said that Standard & Poor's preferred stock index fell to its lowest level since Dec. 30 on Thursday.

"That would mean that all market price gains have evaporated since the first of the year," he said.

ING, Aegon end weaker

As global debt concerns continued to spook investors, foreign insurers were feeling the burn, according to sources.

Aegon's perpetual capital securities (NYSE: AEF) dropped 20 cents - about double the overall market average of 10 cents on $25-par issues - to $24.43.

Trading in the security was above average at about 115,218 securities.

In ING paper, the 7.375% preferreds (NYSE: IDG) lost 48 cents to close at $22.80, also in above-average volume. The perpetual hybrids (NYSE: IGK) lost 20 cents to end at $25.15, and the perpetual hybrid capital securities (NYSE: ISF) declined 29 cents to $20.73.

Amsterdam-based ING will report earnings on Aug. 4.

RBS, U.S. banks fall

As has been the case of late, Royal Bank of Scotland preferreds continued to get knocked around.

The RBS series Gs (NYSE: RBSPG) fell 2 cents to $13.49 on Friday, and the series S preferreds (NYSE: RBSPS) lost 13 cents to finish at $16.05.

U.S. banks were also taking a hit, a trader said. As rating agencies pondered a downgrade of the United States' sovereign debt rating, he said that investors were wondering how that could impact banks, particularly those with large Treasury bill holdings.

Bank of America Corp.'s 7% preferreds linked to Countrywide Capital (NYSE: CFCPB) were deemed the day's most active issue. More than 500,000 preferreds traded, and they dropped 12 cents to $24.23.

Bank of America's series H preferreds (NYSE: BACPH) meantime fell a penny to $25.03.

Citigroup Inc.'s series J preferreds (NYSE: CPJ) bucked the overall market trend and gained 8 cents, closing at $25.73.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.