LaSalle Hotel Properties sells upsized issue; Pitney Bowes' new $25-par notes free up

By Stephanie N. Rotondo

Phoenix, Feb. 27 - The primary preferred stock market continued to see new issues coming to market on Wednesday.

LaSalle Hotel Properties said it had launched an offering of series I cumulative redeemable preferreds, the proceeds of which are expected to go toward the redemption of the company's 7.25% series G cumulative redeemable preferreds.

Price talk on the new issue was around 6.5%, a trader reported. The deal came at 6.375% and was upsized to $100 million.

Meanwhile, Pitney Bowes Inc.'s new $375 million issue of 6.7% $25-par notes due 2043 was expected to free up sometime during Wednesday's session and free up it did.

The deal came on Tuesday. The issue topped Wednesday's most active list.

Also making the day's most active list was Countrywide Financial Corp.'s 7% capital securities (NYSE: CFCPB). The paper was down a cent at $25.15.

One market source said the issue was one of his favorites.

"It's so cheap relative to everything else in the [Bank of America] family," he said, noting that not everyone realized that said bank had assumed Countrywide's debt when it bought the mortgage firm in 2008.

NextEra Energy Inc. was also making the active list, as two of its issues made the top five. There was no fresh news out, however, to cause the flurry of activity.

The 5.125% series I $25-par junior subordinated debentures due 2072 (NYSE: NEEPI) were up 3 cents to $24.98, while the 5% series J $25-par junior subordinated debentures due 2073 (NYSE: NEEPJ) gained a penny to close at $24.61.

LaSalle deal prices

Early in the day's session, LaSalle Hotel Properties announced plans to sell series I cumulative redeemable preferreds, with price talk around 6.5%.

"It seems to be going fine," a trader said at midday. "It's a small-ish deal."

The trader saw a less 30-cent bid for paper in the midday gray market.

A market source later said that the issue was expected to be about $50 million but was upsized to $100 million. Before the upsizing, the paper was trading around par in the gray, he said, which he attributed to the underwriters.

But once the deal doubled, "the market backed away," the source said. The securities hit a low of $24.80 before closing at $24.80 bid, $24.90 offered.

"It did better than I would have thought," the source remarked.

The deal priced at the close at par to yield 6.375%. Proceeds will likely be used to redeem the 7.25% series G preferreds (NYSE: LHOPG), which ended the day down 17 cents at $25.34.

LaSalle Hotel is a Bethesda, Md.-based real estate investment trust.

Pitney's notes free up

Pitney Bowes' new 6.7% $25-par notes due 2043 freed up about halfway through Wednesday trading and also dominated overall trading, with well over 4 million notes changing hands.

At midday, a trader pegged the notes at less 25 cents bid.

After the close, a source said the issue was at par, though the volume weighted average price was $24.86.

"I think the underwriters might have posted it at $25 because they didn't want it to look bad," the source said. However, he did see some trades in the latter part of the day around par.

Pitney Bowes is a Stamford, Conn.-based provider of postage equipment and services.

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