DDR, Black & Decker bring new deals; Senior Housing frees to trade; Kimco, Vornado hit par

By Stephanie N. Rotondo

Phoenix, July 18 - The preferred stock market saw two new issues hit the tape on Wednesday.

First up, DDR Corp. announced plans to sell at least $175 million of class J cumulative redeemable perpetual preferred shares. The deal priced after the close, coming upsized and lower than the original price talk of 5.675%.

However, the deal was faring "kind of not so good," a market source said.

Stanley Black & Decker Inc. also launched a new issue, an offering of junior subordinated notes due 2052. Like DDR, the issue priced after the bell. The company upsized the deal to $750 million from $200 million, and the coupon was revised downward versus original price talk.

"It should be really good demand," a trader said. "It's a good name, a good yield."

Meanwhile, Senior Housing Properties Trust's new $350 million issue of 5.625% $25-par senior notes due Aug. 1, 2042 freed from the syndicate Wednesday. The deal priced Tuesday.

According to a market source, the issue was among the day's most actively traded securities.

Next week, the new issue calendar is supposed to pick up, a trader said.

"I heard next week is supposed to be busy with new issues," he said. "So that's always good, because we have been pretty bored."

In the secondary, Ally Financial Inc.'s preferred shares were on the move as the company said it was paying out $201 million of dividends on the preferred securities - including a $134 million payment to the U.S. Treasury Department.

On the news, Ally preferreds initially traded upward, but they ended the day in mixed fashion.

DDR prices new deal

DDR brought a $200 million offering of 6.5% class J cumulative redeemable perpetual preferreds on Wednesday.

Price talk was originally around 6.625%, according to a trader, who saw the paper trading at $24.82 offered in the gray market ahead of the deal's pricing.

"No selling group. It's a tiny deal," he said.

The issue was upsized from $175 million.

Another market source said the paper was doing "kind of not so good," though he did not have any fresh markets available.

J.P. Morgan Securities LLC is the bookrunning manager. BNY Mellon Capital Markets, LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are the co-managers.

Proceeds will be used to redeem the company's 7.5% class I cumulative redeemable preferreds. Any remaining funds will be used for general corporate purposes, including a possible partial redemption of the 7.375% class H cumulative redeemable preferred stock.

Of those issues, the class I preferreds (NYSE: DDRPI) were down 36 cents, or 1.43%, at $25.14, and the class H preferreds (NYSE: DDRPH) declined 21 cents to $25.14.

The Beachwood, Ohio-based real estate investment trust will redeem the class I preferreds on Aug. 20 at $25.1875.

Black & Decker hugely upsized

Stanley Black & Decker priced a massively upsized offering of 5.75% $25-par junior subordinated notes due 2052 after the market closed Wednesday.

The deal was originally expected to be about $200 million, and initial price talk was 5.875%.

A trader said the issue was trading at par already in the gray market ahead of pricing.

After the bell, but before the deal actually priced, a market source said the paper was trading "very well" at par or "just under."

Settlement is expected July 25.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers. Citigroup Global Markets Inc. and RBC Capital Markets LLC are the co-managers.

Proceeds will be used for general corporate purposes, which may include repayment of short-term debt and the refinancing of recent and near-term debt maturities.

Senior Housing frees

Senior Housing Properties' $350 million issue of 5.625% $25-par senior notes due Aug. 1, 2042 feed to trade on Wednesday. The deal priced Tuesday.

But despite topping the day's most active list, the issue was not performing well, a market source said.

He saw the paper trade down 31 cents to $24.59, blaming "aggressive pricing" for the dip. The volume-weighted average price for the day was $24.72.

"Not a sign of a deal that went incredibly well," he said.

The Newton, Mass.-based REIT will apply to list the notes on the New York Stock Exchange. Settlement is expected Friday.

Bank of America Merrill Lynch, Citigroup, UBS and Wells Fargo are the joint bookrunning managers. The joint lead managers are Jeffries & Co. and RBC.

Proceeds will be used to prepay the variable portion of a Federal National Mortgage Association secured term loan, to repay amounts outstanding under a revolving credit facility and for general business purposes, which may include funding possible future acquisitions of properties.

Kimco, Vornado hit par

Among other recent deals, Kimco Realty Corp.'s $225 million issue of 5.5% class J cumulative redeemable preferreds were seen hitting par, as were Vornado Realty Trust's $300 million of 5.7% series K cumulative redeemable perpetual preferreds.

Ally ends mixed

Ally Financial announced Wednesday that it will pay out $201 million of preferred stock dividends, including a $134 million payment to the U.S. government.

Initially, the news gave Ally's preferreds a bit of a boost.

The 8.5% fixed-to-floating-rate series A perpetual preferreds (NYSE: ALLYPB) rose a nickel to $23.40 in midday trading, while the 8.125% series 2 fixed-to-floating-rate trust preferreds (NYSE: ALLYPA) gained 3 cents to trade at $24.38.

By the session's end, however, the preferreds were mixed, with the 8.5% preferreds gaining 11 cents to close at $23.46 and the 8.125% TruPs dropping 2 cents to $24.33.

Detroit-based Ally will pay 53 cents per share in dividends on the 8.5% series A preferreds to holders of record as of Aug. 1. The company also intends to pay $17.50 per share in dividends on its series G fixed-rate cumulative preferreds.

With the $134 million payment to the government, that brings Ally's total amount repaid to the Treasury to $5.7 billion. The company originally received more than $17 billion of bailout funds.

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