United States Cellular notes trade up; Hersha Hospitality plans cumulative preferreds sale

By Andrea Heisinger

New York, May 10 - The primary preferred stock market produced no new paper on Tuesday, but those in the market were watching how United States Cellular Corp.'s $25-par senior notes sold late Monday performed in trading.

Those bonds were at first seen hovering near issue price and then "moved up a little" later in the afternoon, a source said.

Other than that bit of activity, the market was quiet, a source said early in the afternoon.

"Everything is moving up," he said, citing a lack of new issues. "Stuff is slowing coming into where corporate yields are."

Later in the day, a deal was announced by Hersha Hospitality Trust. No size was given, and pricing is expected on Wednesday.

The "market was up" for the day, a source said. "It was a light news day, nothing much in the headlines."

He added that issues were up 5 to 10 cents per share overall. The top three most-active preferreds being traded were from financial names including Citigroup Inc., Deutsche Bank AG and Goldman Sachs Group, Inc.

Hersha plans sale

Hersha Hospitality Trust announced an issue of perpetual series B cumulative redeemable preferred shares. They will be priced at $25 each, according to a 424B5 filing with the Securities and Exchange Commission.

A market source said no size has been announced yet but that "it's likely to be under $100 million."

The bookrunners are Bank of America Merrill Lynch, Barclays Capital Inc., Morgan Stanley & Co., Inc. and Raymond James & Associates.

Proceeds will be contributed to the operating partnership in exchange for preferred partnership interest in the operating partnership.

The real estate investment trust for hotel acquisitions is based in Harrisburg, Pa.

U.S. Cellular bonds trade up

The $300 million of $25-par senior notes due 2060 issued by U.S. Cellular were "trading around par" in the afternoon after being freed for the secondary. The 6.95% notes were sold too late on Monday for trading, the source said.

Another source said later in the afternoon that the notes were "a little south" of par at $24.96.

Financial names active

The three most actively traded shares of the day were from financial names, a source said late in the afternoon.

Citigroup shares were up 7 cents and were the most active of the day. They closed at $26.47 with 710,000 shares traded, the source said.

Next in line was Deutsche Bank, which closed down 2 cents per share on the day at $25.11. There were 640,000 shares traded.

Goldman Sachs preferreds were also active. They closed up 5 cents on the day at $24.75 with 630,000 shares traded, the source said.

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