Midday Commentary: Entertainment Properties launches $75 million sale of series F preferreds

By Stephanie N. Rotondo

Phoenix, Oct. 4 - It was "another day, another deal" in the preferred stock market, a trader said Thursday, as Entertainment Properties Trust launched an offering of at least $75 million series F cumulative redeemable perpetual preferreds.

Pricing is expected to be between 6.625% and 6.75%.

A trader saw the issue offered at $24.70 in the gray market as of midday.

The trader also noted that he heard Standard & Poor's planned to assign a "B" rating to the paper.

Proceeds from the sale will be used to redeem the 7.375% series D cumulative redeemable preferreds (NYSE: EPRPD). That issue was down a nickel in midafternoon trading, at $25.05.

In recent deals, General Electric Capital Corp.'s $825 million of 4.875% $25-par senior notes due 2052 - a deal that priced late Tuesday - moved up to trade at $24.80.

In the secondary space, Bank of America announced that it was redeeming $5.13 billion of trust preferreds in early November. A trader said all the called issues had been halted.

"They were around par anyway," he said.

He explained that by halting trading in the called securities, investors who had bought the respective issues were protected. He noted that when GE Capital announced its new deal, saying that proceeds would be used to call another issue, the paper was not halted ahead of time and the securities lost a sizable chunk of value.

The redemption of the Bank of America securities is meantime being touted as a positive for the bank. The company said it expects to post a $100 million pre-tax charge in the fourth quarter due to the call, but that interest expense cost savings would be $50 million for the remainder of 2012 and about $300 million in 2013.

© 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.