Tortoise Energy, Summit Hotel announce week's first new deals; REITs get repositioned

By Stephanie N. Rotondo

Phoenix, Dec. 3 - Two new deals kicked off in the preferred stock market Monday.

Tortoise Energy Infrastructure Corp. announced an offering of $10-par series B mandatory redeemable preferred stock. The deal priced shortly before the close, an $80 million issue to yield 4.375%.

Summit Hotel Properties Inc. also said it was planning a deal, selling series B cumulative redeemable perpetual preferreds.

A trader said there were not many details yet available for the Summit transaction, though he saw price talk at around 8%.

The deal had not priced as of press time.

There seemed to be some portfolio repositioning going on during the day's session, which was causing several real estate investment trust names to trade actively, including Duke Realty Corp. and SL Green Realty Corp.

Overall, trading was "very light" away from new issues, a market source said. "It's the first of the month, going into the last month of the year."

On average, preferred stocks were up about 1 cent, "so not exactly volatile," the source added.

Tortoise prices, hits par

Tortoise Energy Infrastructure brought $80 million of 4.375% series B mandatory redeemable preferreds on Monday.

The preferreds are mandatorily redeemable on Dec. 31, 2027 and payable monthly.

At midday, a trader said he had yet to see any details on the deal, though he did see a less 5 cent bid for paper in the gray market.

After the deal priced, paper was offered at par, he said.

The non-diversified, closed-end fund is based in Leawood, Kan.

Repositioning REITs

A market source said activity in several REIT names "might be somebody repositioning."

Duke realty's 8.375% series O cumulative redeemable preferreds (NYSE: DREPO) ended up a penny at $25.86. SL Green Realty's 7.625% series C cumulative redeemable preferreds (NYSE: SLGPC) meantime ended at $25.30, also up a penny.

The source noted that Duke's issue was currently callable and trading at a negative yield to call.

"I'd argue, why wouldn't you sell?" he said.

SL Green's prefereds are also callable but not at a negative yield, the source added.

Also busy were Kimco Realty Corp.'s $175 million issue of 5.625% class K cumulative redeemable perpetual preferreds, a deal that priced Nov. 28.

A source said that action was likely due to repositioning that comes after a deal frees the syndicate.

The prefereds ended the day flat at $24.65.

Comcast frees up

Comcast Corp.'s 250 million of 5% senior notes due 2061 freed from the syndicate early Monday.

The deal priced Thursday.

A trader said the preferreds were trading at $24.80 as of midday.

At the close, a market source placed the issue at par, with more than 2 million shares changing hands.

© 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.