Preferreds see firm tone; RAIT Financial sells upsized $70 million $25-par senior notes

By Stephanie N. Rotondo

Phoenix, Aug. 11 – A preferred stock trader said early Monday that “everything is kind of ticking up a little bit.”

The Wells Fargo Hybrid and Preferred Securities index closed up 11 basis points. It was up 17 bps at mid-morning.

RAIT Financial Trust added a new issue to the calendar, launching a sale of at least $35 million $25-par senior notes due 2019.

The deal came upsized at $70 million after the market closed.

Price talk was around 7.25%, according to a trader, but it was then revised to 7.125%, which is where the deal came.

“It’s a nice piece of paper,” the trader said of the five-year maturity, which is non-callable for three years. “It should do well.”

He saw a $24.85 gray market for the paper early in the day. Once the coupon had been revised, he saw the issue at $24.70.

The Philadelphia-based real estate investment trust’s 7.625% $25-par notes due 2024 (NYSE: RFT) were trading up 6 cents to $24.35.

Deutsche Bank Securities Inc., Barclays, Keefe Bruyette & Woods and Credit Suisse Securities (USA) LLC were the joint bookrunners on the non-rated deal.

Hallmark Financial Services Inc. also announced a deal during the session, though it did not price.

The Fort Worth, Texas-based insurance company said it was selling at least $25 million of $25-par senior notes due 2024.

Sandler O’Neill + Partners and Incapital are leading that deal.

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