Morning Commentary: Spirit Realty plans first preferred stock issue; Investors Real Estate prices

By Stephanie N. Rotondo

Seattle, Sept. 26 – More real estate investment trusts were adding deals to the preferred stock new issue calendar on Tuesday.

Spirit Realty Capital Inc. said it was offering series A cumulative redeemable preferreds, with price talk around 6%.

Morgan Stanley & Co. LLC, BofA Merrill Lynch and Wells Fargo Securities LLC are running the books.

A trader said the paper was bid for at $24.65 in the early gray market, though he added that there were “no real offers” for the preferreds.

The sale marks the company’s first entry into the world of preferred stock.

The company plans to use proceeds to pay down its revolving credit facility.

Elsewhere in the REIT realm, Investors Real Estate Trust announced the pricing of its series C cumulative redeemable preferreds, which was first announced on Monday.

The company sold $100 million of the preferreds at par to yield 6.625%. That was in the middle of the 6.25% to 6.75% price talk.

BMO Capital Markets and Raymond James & Associates Inc. were the bookrunners.

At mid-morning, a trader quoted the issue at $24.65 bid, $24.70 offered.

From Monday’s business, Federal Realty Investment Trust’s $150 million of 5% series C cumulative redeemable preferreds were pegged at $24.70 bid, $24.75 offered.

The issue priced tighter than the 5.125% price talk and was upsized from $100 million.

BofA Merrill Lynch, UBS Securities LLC and Wells Fargo were the joint bookrunners.

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