Morning Commentary: PS Business bringing new issue; Bluerock Residential, other recent deals mixed

By Stephanie N. Rotondo and Christine Van Dusen

Seattle, Oct. 11 – The preferred stock market was “a little softer with the bond market being down and the stock market being down,” a trader said Tuesday.

The Wells Fargo Hybrid and Preferred Securities index was off 33 basis points at mid-morning.

Despite the weak tone, PS Business Parks Inc. added a new deal to the calendar, a $100 million offering of series W cumulative preferred stock.

Price talk is 5.25%, according to a market source.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are running the books.

As for deals priced last week, Bluerock Residential Growth REIT Inc.’s $67.5 million of 7.125% series D cumulative preferreds – a deal from Oct. 5 – were “kind of wide” at $24.55 bid, $24.80 offered, a trader reported.

“I think people are dumping whatever they had leftover,” the trader opined.

Public Storage’s $350 million of 4.9% series E cumulative preferreds were meantime seen “hanging around” a $24.72 to $24.75 area.

That issue came Oct. 6.

Also from Oct. 6, Chimera Investment Corp.’s $135 million of 8% series A cumulative redeemable preferreds were pegged at $24.60 bid, $24.70 offered.

“It’s probably just the manager buying there,” a trader remarked.

The new issue of preferreds from Hamilton, Bermuda-based marine transportation services provider Teekay LNG Partners LP received some attention in trading.

The company's $125 million of 9% series A cumulative redeemable perpetual preferred units listed on the New York Stock Exchange on Monday under the symbol “TGPPA" after pricing on Sept. 28 in line with price talk.

On Tuesday, the preferreds ticked up 2 cents to return to $25.00.

And National Retail Properties Inc.’s $300 million of 5.2% series F cumulative redeemable preferreds – which are trading under the symbol “NNNPP” for the time being – were flat to Monday, at $24.92, which was up about 9 cents from previous trades.

The preferreds priced Oct. 4.

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