Apollo Global comes with upsized inaugural preferred deal; HCI to redeem 8% $25-par notes

By Stephanie N. Rotondo

Seattle, Feb. 28 – A new preferred stock deal came to market in the last trading session of February, a $250 million offering of 6.375% series A preferreds from Apollo Global Management LLC.

Price talk was initially around 6.5% but was later revised to 6.375%. The deal was upsized from $150 million.

After pricing was revised, the preferreds were quoted at $24.82 bid, $24.88 offered in the gray market.

Prior to the revision, the preferreds were pegged at $24.85 bid in the early gray market, but no offers.

“I heard it is mostly going to be put away to institutional [investors],” a trader said.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC ran the books.

Proceeds will be contributed to Apollo’s indirect subsidiaries for general corporate purposes.

Meanwhile, HCI Group Inc. priced a $125 million sale of 4.25% convertible senior notes due 2037 on Tuesday, the proceeds of which will go, in part, to redeem the company’s outstanding 8% $25-par senior notes due 2020 (NYSE: HCJ).

“This is the first time I’ve seen in awhile where someone issues a convert to take out a preferred,” one sellside source noted. “This could be a new trend.”

On the news, the 8% notes were down 73 cents, or 2.81%, at $25.27.

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