Midday Commentary: Annaly, Magnum to price new issues; PS Business frees up: JPMorgan lists

By Stephanie N. Rotondo

Phoenix, Sept. 6 - The preferred market was heading higher Thursday given the announcement of the European Central Bank's bond-buying program.

"All is well," a trader said. "I think people will start rushing for yield if they think it's safe."

However, he added that they might not necessarily be rushing into the preferred market.

Annaly Capital Management Inc. announced plans for an offering of $100 million series D cumulative redeemable perpetual preferred shares.

Price talk is around 7.5%, according to a trader. He noted that three months ago, the non-rated company completed a sale of 7.625% series C cumulative preferreds and said the 7.5% coupon is "in line for a non-rated [real estate investment trust] that buys mortgages."

The trader said the securities were "doing well" in the gray market, seeing them trade at $24.85.

"That's pretty good considering the other two issues that are out there," he said.

Annaly's series Cs (NYSE: NLYPC) were trading down 26 cents, or 1.02%, at midafternoon at $25.43. The 7.875% series A cumulative preferreds (NYSE: NLYPA) were also weaker, falling 68 cents, or 2.54%, to $25.96.

The New York-based REIT will apply to list the new series of preferreds on the New York Stock Exchange under the ticker symbol "NLYPD."

The joint bookrunning managers are Morgan Stanley & Co. LLC, Bank of America Merrill Lynch, UBS Securities LLC, J.P. Morgan Securities LLC and RBC Capital Markets LLC. The co-managers are Barclays, Credit Suisse Securities (USA) Inc., Deutsche Bank Securities Inc. and Stifel, Nicolaus & Co. Inc.

Proceeds will be used to purchase mortgage-backed securities and for general corporate purposes.

Magnum Hunter to add on

Meanwhile, Magnum Hunter Resources Corp. said it will launch a "best-efforts" offering of up to $250 million of its 8% series D cumulative perpetual preferreds.

Liquidation preference is $50.00 per share. The preferreds (NYSE: MHRPD) traded at $45.50 on Wednesday and were trading at $44.79, down 71 cents, or 1.56%, as of midday Thursday.

There are currently 3.02 million of the series D preferreds outstanding.

Barclays, MLV & Co. Inc. and Wunderlich Securities Inc. are the joint bookrunning managers. National Securities Corp. is the co-manager.

Any proceeds will be used for capital expenditures, working capital, acquisitions, the repayment or refinancing of debt, possible stock repurchases, investments in subsidiaries, a redemption of equity interests and/or general corporate purposes.

PS Business Parks frees

A trader said that PS Business Parks Inc.'s $200 million of 5.75% series U cumulative perpetual preferred shares freed from the syndicate Thursday. The issue priced Wednesday.

He quoted the issue at $24.97 bid, $25.02 offered.

Pricing was originally talked around 5.875% but was revised to 5.75%. The deal was upsized from $100 million.

There is a $30 million over-allotment option.

The company will apply to list the new securities on the NYSE under the ticker symbol "PSBPU." Settlement is expected Sept. 14.

Bank of America Merrill Lynch, Morgan Stanley and Wells Fargo Securities LLC are the joint bookrunning managers. Credit Suisse, JPMorgan and RBC are the co-managers.

Proceeds will be contributed to the company's operating partnership in exchange for preferred units of limited partnership that have substantially identical economic terms as the preferreds. The funds will be for general corporate purposes, including the redemption of all outstanding 6.7% series P cumulative preferreds on Oct. 9.

JPMorgan lists

As was expected, JPMorgan Chase & Co.'s $1.1 billion issue of 5.5% series O noncumulative preferreds listed on the New York Stock Exchange.

The ticker symbol is "JPMPD." The issue priced Aug. 20.

Paper was trading at par as of midday.

© 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.