Alexandria, Kite Realty Group herald new issue plans; Public Storage's latest deal hangs in

By Stephanie N. Rotondo

Portland, Ore., March 7 - Preferred stocks were trending back upward in midweek trading, "but not on a lot of volume," according to a market source.

"The [secondary] market bounced back," another trader said Wednesday, estimating that most issues earned back about half of what they had lost in the previous session.

The primary market saw plans for two new issues announced, one from Alexandria Real Estate Equities Inc. and an add-on from Kite Realty Group Trust. The Alexandria deal was doing well, a trader said, opining that it would "trade at a premium" once it actually came to market.

As for the Kite add-on, the original paper was trading up on the news, though in very light volume.

Neither deal priced on Wednesday.

Meanwhile, Public Storage's recently priced $425 million of 5.75% series T cumulative preferreds were hanging in there, but "never really moved," a trader said. Some of the real estate investment trust's other issues, however, were definitely trading higher.

Alexandria to bring series Es

Pasadena, Calif.-based Alexandria Real Estate Equities intends to sell series E cumulative redeemable perpetual preferreds, the company said in a regulatory filing with the Securities and Exchange Commission.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and RBS Capital Markets LLC are the bookrunners.

A trader said price talk was around 6.5%.

"It's pretty tight," he said, noting that he does not believe there is a selling group. He also remarked that the deal is "decently priced," assuming that it will trade "at a premium" once it hits the marketplace.

He saw a less 5 cents bid on the paper in the gray market shortly before the market closed.

The REIT, which is focused on life science facilities, said it will use proceeds from the new issue to pay down its unsecured credit line.

Additionally, pending board approval, it intends to redeem its 8.375% series C cumulative redeemable preferreds. The issue (NYSE: AREPC) closed up 40 cents, or 1.54%, at $25.60.

Kite plans add-on

Kite Realty Group is adding on to its 8.25% series A cumulative redeemable perpetual preferreds, according to an SEC filing.

The company originally sold 2.8 million preferreds on Dec. 7, 2010.

On the news of the reopening, the preferreds (NYSE: KRGPA) moved up 12 cents to $25.14, though volume was very thin.

The preferreds can be redeemed on or after Dec. 7, 2015.

Wells Fargo Securities LLC is the bookrunner. Raymond James & Associates Inc. is the lead manager.

Proceeds will be used to repay outstanding debt under a revolving credit facility and for other general corporate purposes, including, without limitation, the acquisition of properties, as well as development and redevelopment costs.

Kite Realty is an Indianapolis-based REIT.

Public Storage hangs in

Public Storage's 5.75% series T cumulative preferreds - a $425 million deal that priced Tuesday - "never really moved," according to a trader.

He saw a less 25 cents bid for the paper in the gray market shortly before the bell. After the close, a market source saw the issue closing at $24.80, which was "toward the high end of the range for it." The volume-weighted average price, he noted, was $24.76.

The Glendale, Calif.-based REIT announced the deal Monday, and pricing was in line with talk.

Proceeds will be used to redeem all $476.63 million of its 6.625% series M cumulative preferreds on April 1. The issue (NYSE: PSAPM) moved up a penny to $25.42 in midweek trading.

Also, the company's 6.35% series R cumulative redeemable preferreds (NYSE: PSAPR) were among the day's most actively traded issues. The preferreds traded up 7 cents to $26.90.

Raymond, Health Care rise

Among other recently priced deals, Raymond James Financial Inc.'s $350 million offering of 6.9% $25-par senior notes due March 15, 2042 moved back up after losing ground in Tuesday trading.

A trader pegged the issue around $25.40.

And Health Care REIT Inc.'s $287.5 million of 6.5% series J cumulative redeemable perpetual preferreds were trading around $25.15.

Secondary market gains ground

In secondary trading, Ally Financial Inc.'s 8.125% series 2 fixed-to-floating trust preferreds (NYSE: ALLYPA) closed 11 cents higher at $22.97.

Among foreign issuers, Royal Bank of Scotland Group plc's 6.6% series S noncumulative dollar preference shares (NYSE: RBSPS) earned 17 cents, or 1.07%, closing at $16.13.

Aegon NV's 6.375% perpetual capital securities (NYSE: AEH) meantime improved by 19 cents, ending at $22.86.

And HSBC Holdings plc's 8% exchangeable perpetual subordinated capital securities (NYSE: HCSPB) inched up 6 cents to $27.03.

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