QTS Realty on tap; Compass Diversified frees up; Citigroup, Colony NorthStar in focus

By Abigail W. Adams

Portland, Me., March 7 –The primary market remained active in the preferreds space with a new preferred stock offering launched on Wednesday.

QTS Realty Trust Inc. launched an offering of $25-par perpetual series A cumulative redeemable preferred stock, according to a 424B5 filing with the Securities and Exchange Commission.

Compass Diversified Holdings’ new preferred stock freed to trade on OTC markets under the temporary ticker “CMPDP.”

The 7.875% series B fixed-to-floating rate cumulative preferred shares priced on Tuesday.

While trading volume was light in the preferreds space on Wednesday, preferreds from Colony NorthStar Inc. and Citigroup were active. Colony NorthStar’s preferreds were mixed in heavy trading while Citigroup’s preferreds traded down slightly.

QTS Realty’s deal

QTS Realty announced Wednesday plans to price an offering of $25-par perpetual series A cumulative redeemable preferred stock. BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC are joint bookrunners for the offering.

Dividends will be payable quarterly. The preferred stock is not callable until a specified date in 2023 when it becomes freely callable at par plus accrued dividends.

The preferred stock from the Chicago-based real estate investment trust that invests in carrier-neutral data centers will be listed for trade on the New York Stock Exchange under the ticker “QTSPrA.”

Proceeds will be used to purchase comparable preferred units from QTS’s operating partnership, Quality Tech, LP.

The operating partnership will in turn use proceeds to repay a portion of the outstanding amount under the unsecured revolving credit facility and for general corporate purposes.

Compass trades down

Compass’ new 7.875% series B fixed-to-floating rate cumulative preferred shares were seen trading down on Wednesday after freeing for trade in the OTC markets. The new preferred shares closed Wednesday at $24.65.

Compass priced $100 million, or 4 million shares, of the $25-par series B cumulative preferred stock on Tuesday.

The series B preferred stock will have a fixed dividend of 7.875% until April 30, 2028 when it will switch to a floating rate of Libor plus 498.5 basis points.

The preferred shares will be listed for trade on the NYSE under the ticker “CODIPrB.”

Colony NorthStar mixed

Some of Colony NorthStar’s preferreds continued to see heavy trading volume on Wednesday although with mixed results.

Colony NorthStar’s 7.125% series H cumulative redeemable preferred stock traded up to $22.82, an increase of 7 cents or 0.29%, early in Wednesday’s session.

However, the series H preferreds were unable to hold onto their gains and closed Wednesday at $22.72, a decrease of 3 cents or 0.13%.

Colony NorthStar’s 7.125% series J cumulative redeemable perpetual preferred stock traded up to $23.03, an increase of 7 cents or 0.30%, early in Wednesday’s session.

The preferreds lost some of their early gains but still closed Wednesday up at $23.00, an increase of 4 cents or 0.17%.

Colony NorthStar’s preferreds have been in focus and experienced heavy volume trading since March 1 when the company released its earnings report and announced it was slashing dividend payments on its common stock.

The series H preferreds nosedived to $22.52, a decrease of $1.25, on March 1. The series J preferreds also nosedived to $22.29, a decrease of $1.44, on March 1.

Citigroup active

Preferreds from Citigroup were active on Wednesday with some seeing slight losses in above-average trading volume.

Citigroup’s depositary shares representing the company’s 6.875% series L non-cumulative preferred stock closed Wednesday at $26.18, a decrease of 3 cents or 0.11%.

Nearly 216,000 depositary shares were in play on Wednesday versus the three-month average trading volume of 32,000.

Citigroup Capital XIII’s fixed-to-floating rate trust preferred securities closed Wednesday at $27.35, a decrease of 2 cents or 0.07%. The preferred securities saw almost double their average trading volume on Wednesday with 231,000 securities traded.

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