LaSalle Hotel prices preferred stock; W.R. Berkley sells upsized $25-par debentures

By Stephanie N. Rotondo

Seattle, May 18 – The preferred stock new issue pipeline continued to push out deals during the midweek session.

LaSalle Hotel Properties said it had priced a $150 million offering of 6.3% series J cumulative redeemable preferreds. The deal was first announced on Monday with price talk between 6.375% and 6.5%.

A trader said the issue was trading at $24.95 bid, par offered.

Wells Fargo Securities LLC and BofA Merrill Lynch ran the books.

Dividends will be payable on the 15th day of January, April, July and October, beginning July 15. The preferreds become redeemable on or after May 25, 2021 at par plus accrued dividends.

The company can also redeem the issue in the event of a change of control that results in a delisting event. Alternatively, if the preferreds continue to be listed after a change of control, holders can convert their preferreds into common stock.

Proceeds will be used to reduce amounts outstanding under a senior unsecured credit facility and for working capital and general corporate purposes.

Meanwhile, W.R. Berkley Corp. brought a $290 million sale of 5.75% $25-par subordinated debentures due 2056.

Price talk on that issue was in the 6% area but was later revised to 5.75%. The deal also came upsized from $100 million.

“They will probably back that off to around 5.9%, which is where the Cs are trading,” a trader said ahead of the price revision, referring to the $110 million of 5.9% $25-par subordinated debentures due 2056 (NYSE: WRBPC) that the Greenwich, Conn.-based insurance company sold on Feb. 23.

The new deal was seen at $24.95 bid, par offered in the early gray market, according to the trader. As for the 5.9% notes, they were trading down 27 cents, or 1.05%, at $25.51.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo are the joint bookrunners.

Interest will be payable quarterly on the first day of March, June, September and December, beginning Sept. 1. The company has the option to defer the interest payments for up to five consecutive years.

The notes become redeemable on or after June 1, 2021 at par plus accrued interest. The company can also call the notes, in whole, within 90 days of a tax event, also at par plus accrued interest.

In the event of a rating agency event, the company can also redeem the issue in whole at a price equal to the greater of their principal amount or a make-whole amount plus accrued interest.

Proceeds will be used for general corporate purposes.

New listings on NYSE

Away from coming issues, a slew of recently priced deals began trading on the New York Stock Exchange on Wednesday.

They included Public Storage’s $200 million of 5.125% series C cumulative preferred stock, DuPont Fabros Technology Inc.’s $175 million of 6.625% series C cumulative redeemable perpetual preferred stock – both from May 10 business – and GATX Corp.’s $150 million of 5.625% $25-par senior notes due May 30, 2066, a deal from May 9.

Public Storage’s preferreds (NYSE: PSAPC) finished the day at $24.85, down from $25.02 at the open. DuPont’s preferreds (NYSE: DFTPC) were pegged at $25.20, down a penny from opening levels.

The GATX notes (NYSE: GMTA) were at $24.87, off from $24.99 early in the day.

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