Deals from Farmland Partners, Cherry Hill free to trade; Invesco trades up, Kimco lower

By Stephanie N. Rotondo

Seattle, Aug. 11 – Trading was slowing down in the preferred stock market on Friday.

Amid the muted liquidity, the space was attempting to recover from Thursday’s sizable losses.

The Wells Fargo Hybrid and Preferred Securities index ended the day up 3 basis points, though its was down 18 bps at mid-morning. The index had closed down 64 bps on Thursday.

The U.S. iShares Preferred Stock ETF was also up 3 bps, after ending the previous session off 90 bps.

Thursday’s weakness came as the broader markets sold off on concerns about growing tensions between the United States and North Korea. Come Friday, the equity markets were attempting to rally, as weak inflation data had some thinking that the Federal Reserve may opt to hold interest rates steady at its next meeting.

As for preferred stock dealings, Farmland Partners Inc.’s $131.25 million of 6% series B participating preferred stock – a deal priced late Thursday – freed to trade at mid-morning.

The issue was assigned a temporary ticker symbol, “FPRRP.”

At day’s end, the issue was seen at $24.90, on about 420,000 shares traded.

Raymond James & Associates Inc. and Jefferies LLC ran the books.

The preferreds have an initial liquidation preference of $25.00 a share. That amount could be increased by an additional farmland value appreciation value (FVA), subject to certain caps, until Sept. 30, 2024.

The issue becomes redeemable after Sept. 30, 2021.

Prior to Sept. 30, 2024, no dividends will accrued or be paid on any FVA amount.

If a redemption occurs prior to Sept. 30, 2024, the redemption price will include a premium amount.

The company also has the option to convert the preferreds to common stock after Sept. 30, 2021. Holders also have a right to force a conversion upon a change of control.

Also from Thursday’s business, Cherry Hill Mortgage Investment Corp.’s $55 million of 8.2% series A cumulative redeemable preferreds freed from the syndicate in the early afternoon.

A temporary ticker of “CHMMP” was given to the issue.

The preferreds finished up a nickel at $24.57, with almost 895,500 shares being exchanged.

The company’s inaugural issue came tighter than the 8.25% price talk.

Morgan Stanley & Co. LLC and RBC Capital Markets LLC were the bookrunners.

From Wednesday, Invesco Mortgage Capital Inc.’s $250 million of 7.5% fixed-to-floating rate series C cumulative redeemable preferred stock ticked up 2 cents to close at $24.82.

That issue also has a temporary symbol, “IVSOP.”

The deal came at the tight end of the revised 7.5% to 7.625% price talk. Initially, price talk was 7.625%.

Morgan Stanley, BofA Merrill Lynch, UBS Securities LLC and J.P. Morgan Securities LLC ran the books.

And, from Monday’s business, Kimco Realty Corp.’s $225 million of 5.125% class L cumulative redeemable preferreds dipped a dime to $24.62.

The issue freed to trade early Tuesday, trading under the temporary ticker “KIMRP.”

The new preferreds came tight to the 5.125% to 5.25% price talk. The size of the deal was upped from $150 million.

BofA, Morgan Stanley, UBS Securities and Wells Fargo Securities LLC were the bookrunners.

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