Costamare prices $115 million, existing preferreds mixed; Legacy Reserves down

By Abigail W. Adams

Portland, Me., Jan. 25 – Costamare Inc. sold $115 million in $25-par perpetual 8.875% series E cumulative redeemable preferreds after the market close on Thursday.

As the company brought new preferreds into the market, its existing preferreds were mixed during Thursday’s session.

Legacy Reserves LP’s 8% series A and series B fixed-to-floating rate cumulative redeemable preferred units lost ground in above-average trading during Thursday’s session. The preferreds fell after a recent downgrade from Moody’s Investors Service.

Costamare prices

Costamare priced the first issuance of completely new preferreds of the week after the close on Thursday.

The Monaco-based owner of containerships for charter in the international shipping industry sold $115 million, or 4.6 million shares, of $25-par perpetual 8.875% series E cumulative redeemable preferreds.

Morgan Stanley & Co. LLC, UBS Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Stifel, Nicolaus & Co., Inc. and Credit Suisse Securities (USA) LLC are joint bookrunners for the deal, which carries a greenshoe of $17.15 million, or 686,000 shares.

The preferreds will be listed for trade on the New York Stock Exchange under the symbol “CMREPrE.”

The only other deal so far this week was a $50.5 million add on from Spark Energy, Inc.

Costamare preferreds mixed

Meanwhile Costamare’s existing preferreds were mixed in trading on Thursday.

Costamare’s 7.625% series B cumulative redeemable perpetual preferred stock was the only one of its existing issues to end Thursday up. The preferreds were down 14 cents, or 0.58%, to $24.30 in early trading, but rebounded later in the day.

The series B preferreds ended the session better by 4 cents, or 0.16%, at $24.48.

The company’s 8.5% series C cumulative redeemable perpetual preferred stock slipped 36.15 cents, or 1.4297%, to $24.9233 in early trading. The preferreds rebounded later in the session, but still ended Thursday in the red.

The series C preferreds closed Thursday at $25.03, a decrease of 25 cents, or 1.01%.

The company’s 8.75% series D cumulative redeemable preferred stock was down 58.95 cents, or 2.2774%, to $25.2955 early in the session.

The series D preferreds continued to slip and ended Thursday at $25.22, a decrease of 67 cents, or 2.57%.

Legacy down

Legacy Reserves’ 8% series A and series B fixed-to-floating rate cumulative redeemable preferred units were down in busy trading action on Thursday after the company was downgraded by Moody’s Investors Service earlier in the week.

The 8% series A units, which trade under the ticker “LGCYP,” were down about 15 cents, or 2.27%, to $6.401 in early trading. The notes continued to trade down, ending the day at $6.32, a decrease of 23 cents, or 3.51%.

The 8% series B units, which trade under the ticker “LGCYO,” were down 9 cents, or 1.39%, to $6.40 early in Thursday’s session. The notes saw a slight improvement in active trading, but still ended the day in the red.

The series B units closed Thursday at $6.41, a decrease of 8 cents, or 1.23%.

Moody’s Investors Service lowered Legacy’s speculative grade liquidity rating to SGL-4 from SGL-3 and changed the outlook to negative from stable on Wednesday.

The rating agency said that its action followed Legacy’s purchase of $187 million of 6 5/8% senior notes due 2021 at a discount of about 30% of par.

While the buyback reduced total debt, interest expense increased because it was funded with second-lien debt that carries a higher interest rate, Moody’s said.

The long-struggling units from the Midland, Texas-based limited partnership focused on the acquisition and development of oil and natural gas properties soared earlier in the month after the company announced its debt reduction plan, which included the repurchase of the 6 5/8% notes.

The dividend payments on both units were suspended in January 2016, however, the units are cumulative.

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