Morning Commentary: KKR to sell preferred units; Reinsurance Group, Pebblebrook list on NYSE

By Stephanie N. Rotondo

Seattle, June 13 – The preferred stock new issue market was starting up again on Monday after taking a break on Friday.

KKR & Co. LP announced plans to sell at least $100 million of series B perpetual preferred units, with initial price talk in the 6.625% area.

A trader said the units were quoted at $24.70 bid, par offered in the early gray market.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are leading the deal.

On the news of the deal, the existing 6.75% series A noncumulative preferred units (NYSE: KKRPA) were trading off 19 cents to $25.75 at mid-morning.

Meanwhile, two recently priced deals began trading on the New York Stock Exchange on Monday.

Reinsurance Group of America Inc.’s $400 million of 5.75% $25-par fixed-to-floating rate subordinated debentures due June 15, 2056 listed under the ticker “RZB.”

The paper was trading at $26.12 at mid-morning. A trader quoted the debentures at $26.10 bid, $26.30 offered.

Also listed were Pebblebrook Hotel Trust’s $125 million of 6.375% series D cumulative redeemable preferreds, an issue from June 2.

The ticker is “PEBPD.” The preferreds were at $25.20 in early trading, up from opening levels of $25.16.

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