Raymond James, Health Care REIT deals decline with market; Public Storage sells preferreds

By Stephanie N. Rotondo

Portland, Ore., March 6 - Preferred stocks were "not happy" in Tuesday trading, a trader reported.

Shortly before the market closed, the trader said preferred stocks were down 40 cents "across the board, more on European banks," as Greece warned its creditors that a default is likely if they do not get a tender offer done. One market source called the country's tactics "bullying with teeth," although the bullying was warranted, he said.

Even recent new issues from Raymond James Financial Inc. and Health Care REIT Inc. were coming in, according to sources.

Public Storage priced its previously announced offering of series T cumulative redeemable preferreds. Despite the generally soft tone to the market, it performed rather well.

Raymond James paper falls

Raymond James' $350 million of 6.9% $25-par senior notes due March 15, 2042 were weakening in Tuesday trading given the negative tone of the broader markets.

Before the close, a trader saw the notes at $25.25. After the bell, another market source pegged the baby bonds at $25.20, down 27 cents on the day.

"Everything was down," he noted, adding that the volume-weighted average price of the bonds was $25.34. "So it's not that dramatically different," he said.

The St. Petersburg, Fla.-based financial services company priced the issue Feb. 29.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Raymond James & Associates Inc. were the joint bookrunners. Co-managers were Fifth Third Securities Inc., U.S. Bancorp Investments Inc., BB&T Capital Markets and BNY Mellon Capital Markets LLC.

Proceeds will be used to fund part of the company's acquisition of Morgan Keegan & Co. Inc. and MK Holding Inc.

Health Care slips

Health Care REIT's $287.5 million sale of 6.5% series J cumulative redeemable perpetual preferred stock - another deal that priced Feb. 29 - also came in during the session.

A trader said the issue was trading "barely above par."

The real estate investment trust is focused on senior housing and health-care facilities and is based in Toledo, Ohio.

Public Storage deal priced

Public Storage brought a $425 million offering of 5.75% cumulative preferreds shares of beneficial interest, series T, a trader reported Tuesday.

The deal was announced Monday. Pricing was in line with talk.

Though the broad market was weak, the new issue seemed to be holding up fairly well. Shortly before the bell, a trader had seen a $24.70 bid. Another market source quoted the issue at $24.65 bid, $24.75 offered in the gray market.

The underwriters have a $63.75 million over-allotment option, the company said in an FWP filing with the Securities and Exchange Commission.

The Glendale, Calif.-based real estate investment trust will apply to list the preferreds on the New York Stock Exchange under the symbol "PSAPT."

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Settlement is expected March 13.

Proceeds will be used to redeem all $476.63 million of the company's 6.625% series M cumulative preferred shares on April 1. The issue (NYSE: PSAPM) fell 2 cents to $25.41.

Foreign banks decline

With concerns of a Greek default flaring up again, the secondary market - particularly banks and specifically European banks - had a negative ring to it Tuesday.

Aegon NV's 6.375% perpetual capital securities (NYSE: AEH) fell 19 cents to $22.67, while ING Groep NV's 7.375% perpetual hybrid capital securities (NYSE: IDG) lost 55 cents, or 2.26%, to end at $23.74.

Also, Royal Bank of Scotland Group plc's 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) declined by 42 cents, or 2.34%, to $17.569.

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