Pitney Bowes sells 6.7% $25-par notes; CapLease prices add-on; Hersha's new deal frees up

By Stephanie N. Rotondo

Phoenix, Feb. 26 - The preferred stock market got another new issue on Tuesday, as Pitney Bowes Inc. announced plans to sell $25-par notes due 2043.

Price talk on the deal was around 6.75%, a trader said. The deal came at the end of business, with $375 million notes being priced at par to yield 6.7%.

CapLease Inc. also brought a deal, a $21.25 million add-on to its 7.25% series C cumulative redeemable preferreds. The new shares were priced at a discount to Tuesday's closing share price.

Meanwhile, Hersha Hospitality Trust's new $75 million issue of 6.875% series C cumulative redeemable perpetual preferreds freed to trade early Tuesday.

The deal priced late Monday, coming upsized from $65 million.

Pitney Bowes prices

Pitney Bowes priced a $375 million offering of 6.7% $25-par notes due March 7, 2043 on Tuesday.

Ahead of pricing, a trader saw the issue bid for at less 22 cents and offered at $24.95 in the midday gray market.

At the bell, another market source said the paper hit a high of $24.875 before backing off to "$24.80-ish."

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC ran the deal, which includes change-of-control and early call provisions.

The Stamford, Conn.-based provider of postage equipment and services will use the proceeds to fund a $310 million tender offer for three series of notes.

CapLease brings add-on

CapLease, a New York-based real estate investment trust, sold $21.25 million of its 7.25% series C cumulative redeemable preferreds in an add-on offering.

The 850,000 preferred shares were priced at a discount at $24.73235 each. The stock (NYSE: LSEPC) closed at $26.19 on Tuesday, up 28 cents, or 1.08%.

The amount of shares issued in the add-on will effectively double the total amount of shares outstanding.

CapLease said the proceeds from the sale would likely be used to redeem its 8.125% series A cumulative redeemable preferreds. That issue (NYSE: LSEPA) gained 7 cents to $25.46.

Hersha frees, announces call

Hersha Hospitality's new 6.875% series C cumulative redeemable preferreds freed from the syndicate on Tuesday.

The deal priced Monday.

A trader quoted the paper at $25.10 bid, $25.20 offered.

On Tuesday, the Philadelphia-based REIT announced it was redeeming all of its 8% series A cumulative redeemable preferreds on March 28.

The redemption price is $25.4056, including accrued dividends.

The stock (NYSE: HTPA) fell 9 cents to $25.36 on Tuesday.

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