Ashford Hospitality deal upsizes; Medley add-on on tap; National Retail, Eagle Point list

By Stephanie N. Rotondo

Seattle, Oct. 13 – After spending the week trending lower – including in early Thursday trading – the preferred stock market managed to gain some traction by the end of the day.

The Wells Fargo Hybrid and Preferred Securities index finished the day up 8 basis points. The index was down 29 bps at mid-morning.

Despite the volatility, Ashford Hospitality Trust Inc. added a deal to the new issue calendar, a $100 million offering of series G cumulative preferreds.

The deal came upsized at $150 million and in line with the 7.375% price talk.

Ahead of pricing, a trader said there was a “standing bid” of $24.68 in the early gray market, though he noted that there were not yet any offers.

Morgan Stanley & Co. LLC and UBS Securities LLC are running the books.

The Dallas-based real estate investment trust said it could use the proceeds to redeem some or all of its 8.55% series A cumulative preferreds or its 8.45% series D cumulative preferreds.

On the heels of the new deal, the series As (NYSE: AHTPA) traded off a dime to $25.10, while the series Ds (NYSE: AHTPD) weakened 18 cents to $25.16.

The 7.375% series F cumulative preferreds (NYSE: AHTPF) – the most active of the preferred issues – declined 34 cents, or 1.32%, to $25.40.

Medley LLC also brought a deal, of sorts. The New York-based asset management firm said it planned to sell $25 million more of its 6.875% $25-par unsecured notes due 2026.

“It’s weird they way they are doing it,” a trader said, hearing the company planned to issue the add-on at $24.60 apiece.

The trader said he thought it was “ridiculous” for the company to bring a discounted deal just two months after the original issuance.

Medley originally priced $25 million of the notes on Aug. 4.

“It’s a silly, short-sighted move,” he said.

The notes (NYSE: MDLX) closed at $24.48, down 30 cents, or 1.21%. The notes were trading at $24.54 at mid-morning, down 24 cents.

Incapital LLC, FBR Capital Markets, JonesTrading, William Blair & Co. and Ladenburg Thalmann & Co. Inc. are the joint bookrunners.

As for recently priced deals, National Retail Properties Inc.’s $345 million of 5.2% series F cumulative redeemable preferred stock listed on the New York Stock Exchange on Thursday under the ticker “NNNPF.”

The paper was trading at $24.82 at the bell, which compared to $24.70 at the open.

The deal priced Oct. 4.

Eagle Point Credit Co. Inc.’s $30 million of 7.75% series B term preferred stock due 2026 also hit the NYSE on Thursday under the symbol “ECCB.”

That issue – which priced Oct. 5 – closed at $25.54. The paper opened at $25.30.

Wells Fargo down pre-earnings

Away from new and recent deals, Wells Fargo & Co.’s 6% series V class A noncumulative preferreds (NYSE: WFCPV) traded off in the wake of news that John G. Stumpf, chief executive officer, was stepping down.

The preferreds fell a dime to $26.01.

News of Strumpf’s resignation came late Wednesday amid continued fallout from the bank’s fake account scandal.

The resignation is effective immediately. Stumpf will be replaced by Timothy J. Sloan, president and chief operating officer.

Investors will be wanting to hear more about the exit, as well as what the company is doing to repair the damage from the scandal, when Wells Fargo reports third-quarter results on Friday.

Along with Wells Fargo, J.P. Morgan Chase & Co. and Citigroup Inc. will report results on Friday as well.

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