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Morning Commentary: Costamare adds deal to calendar; Gladstone seen pricing Wednesday
By Stephanie N. Rotondo
Phoenix, May 6 – The primary preferred stock pipeline was stacking up Wednesday as Costamare Inc. announced plans to sell series D cumulative redeemable preferreds.
A trader said price talk on the issue was in the 8.75% area. The paper was offered at $24.75 in the early gray market.
Morgan Stanley & Co. LLC, UBS Securities LLC, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Stifel Nicolaus & Co. Inc. are running the books.
Following the new issue announcement, the Athens, Greece-based containership company’s outstanding preferreds took a hit.
The 7.625% series B cumulative redeemable preferreds (NYSE: CMREPB) were off 88 cents, or 3.54%, at $24.00 a share at mid-morning. The 8.5% series C cumulative redeemable preferreds (NYSE: CMREPC) were down 46 cents, or 2.33%, to $24.88.
The market was meantime awaiting pricing on Gladstone Investment Corp.’s offering of series C cumulative term preferreds due 2022.
The deal was announced Tuesday. Price talk was in a 6.5% area.
A trader said the deal was expected to price Wednesday afternoon, perhaps coming upsized at $35 million from $25 million.
Still, he saw few gray markets for the preferreds.
“The manager has been pretty good about keeping it out of the street,” the trader said. “It should price and trade with a premium.
Janney Montgomery Scott LLC is the bookrunner. Co-lead managers include J.J.B. Hilliard, W.L. Lyons, LLC, Wunderlich Securities, William Blair & Co. and Ladenburg Thalmann.
Maxim Group LLC is the co-manager.
As for the secondary market, it remained weak after Tuesday’s sell-off.
The Wells Fargo Hybrid and Preferred Securities index was down 37 basis points at mid-morning.
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