Morning Commentary: 1347 Property Insurance to price new deal; preferreds mixed in trading

By Abigail W. Adams

Portland, Me., Feb. 20 – The preferred stock primary market kicked the week off with the launching of a new offering.

1347 Property Insurance Holdings Inc. plans to price $20 million, or 800,000 shares, of 8% series A perpetual cumulative preferred stock at $25.00 per share on Thursday, according to a market source.

Boenning & Scattergood, Inc. is the bookrunner for the deal, which carries a greenshoe of $3 million, or 120,000 shares.

Net proceeds are expected to be $18.7 million, or $21.6 million if the greenshoe is exercised.

Proceeds will be used to complete the repurchase of $1.5 million shares of the company’s series B preferred stock from IWS Acquisition Corp., for future potential acquisitions and for general corporate purposes.

The offering is the first new preferred stock deal in several weeks. While there have been offerings of baby bonds, there have been no new preferred stock offerings since late January when the sell-off in equity markets began.

In the secondary market, preferreds were mixed early in Tuesday’s session with the Wells Fargo Hybrid & Preferred Securities Financial index seeing gains and the U.S. iShares Preferred Stock ETF seeing losses.

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.11%.

The U.S. iShares Preferred Stock ETF was down 0.01%.

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