New issue calendar heats up; Realty Income prices add-on; Pennsylvania REIT to sell preferreds

By Stephanie N. Rotondo

Portland, Ore., April 12 - Several small new preferred stock issues were announced on Thursday, but traders saw little interest being thrown their way.

Realty Income Corp., the Monthly Dividend Co., priced an add-on offering of its 6.625% monthly income series F cumulative redeemable preferreds. The preferreds were sold at a minor discount, and the existing preferreds - which were originally issued Feb. 7 - traded upward.

Pennsylvania Real Estate Investment Trust also announced plans for a new deal. The company said it will price series A cumulative redeemable perpetual preferreds. A trader said he heard the issue would be small and, as such, he was not seeing a lot of action in it.

Overall, however, the preferred market continued to move up on so-so trading volume.

"Everything was up modestly," a trader said.

Realty Income prices add-on

Realty Income brought a $35 million offering of 6.625% monthly income series F cumulative redeemable preferreds.

The company is selling the 1.4 million preferreds for $25.2863 each plus accrued dividends of 1.84 cents from April 15. Including the dividend, the sale price is a nearly 1% discount to Thursday's closing share price of $25.55 (NYSE: OPF).

The existing preferreds moved up by 7 cents, or 0.27%, on Thursday.

The company originally issued $373.75 million, or 14.95 million, of the preferreds on Feb. 7.

Settlement is expected April 19.

Citigroup Global Markets Inc. is the bookrunner.

Proceeds will be used to repay a portion of borrowings under the company's $425 million acquisition credit facility. Any remaining funds will be used for general corporate purposes and working capital, including potential acquisitions.

Realty Income is an Escondido, Calif.-based real estate investment trust.

PREIT coming to market

Pennsylvania REIT intends to sell series A cumulative redeemable perpetual preferred shares, the company announced Thursday.

A trader said talk on the expected "small deal" was 8.875%.

"I heard it's very tiny with no syndicate or selling group," he said.

He added that he saw a $24.60 bid for the paper in the gray market but no offers.

The Philadelphia-based REIT will apply to list the preferreds on the New York Stock Exchange under the symbol "PEIPA."

Wells Fargo Securities, LLC, Citigroup and Bank of America Merrill Lynch are the joint bookrunners.

Proceeds will be used to repay amounts outstanding under the company's revolving credit facility and other debt and for other general corporate purposes.

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