UMH Properties dips; Morgan Stanley misses profit estimate; Targa Resources holds steady

By Christine Van Dusen

Atlanta, Oct. 19 – UMH Properties Inc.'s new preferred shares saw some activity and investors were on the lookout for new deals from banks on an otherwise mostly uneventful Monday for the preferred stock market.

UMH priced a downsized $45.03 million 8% series B cumulative redeemable preferred stock (UMHPB) at par of $25.00 on Thursday via CSCA Capital Advisors LLC. On Monday the preferreds were spotted at $24.67 after moving to $25.86 on Friday.

The deal came smaller than the previously announced maximum size of up to $50 million and beyond the wide end of price talk that had been set at a dividend of 7.375% to 7.5%.

UMH sold 1,801,200 shares of the preferreds.

The company's existing 8.25% cumulative redeemable preferred shares, series A, traded at $25.88, down 11 cents, on Monday morning, before closing the day at $25.96.

Also getting attention on Monday were banks, which have been releasing their third-quarter earnings over the last week or so, a trader said. Morgan Stanley was the latest and reported a 15% decline in trading revenue and lower-than-expected overall earnings.

The bank’s non-cumulative preferred shares, series A, (MS.PA) closed Monday at $19.98, down 2 cents, while its depository preferred shares, series G, fell 11 cents to $26.48 (MS.PG).

“I wouldn't be surprised if we saw a few deals this week,” the trader said. “There are a lot of earnings coming out. I think we may see a few banks, after they report, bring something to shore up Tier 1 capital.”

In other trading, Houston-based Targa Resources Partners LP's 9% fixed-to-floating rate cumulative redeemable preferred units (TGARP) were spotted at $25.00 to $25.10, near the previous week’s levels.

An additional $15 million of the units were sold Wednesday via Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC. Added to the $110 million initially sold on Oct. 7, total issuance comes to $125 million.

The over-allotment options allowed for up to $16.5 million additional units to be sold.

Falling off radar screens on Monday was the new issue from Bluerock Residential Growth REIT Inc., which on Friday printed $62.5 million 8.25% series A cumulative redeemable perpetual preferred stock (BRGPA) at $25.00 per share.

Wunderlich Securities Inc. and Compass Point were the joint bookrunning managers. DA Davidson & Co. and Janney Montgomery Scott LLC were co-lead managers.

On Monday, a trader said, “we haven't seen any markets yet. No calls from brokers.”

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