Senior Housing Properties prices 5.625% $25-par notes; Chesapeake lists; Kimco doing well

By Stephanie N. Rotondo

Phoenix, July 17 - Recent deals continued to perform well in the preferred stock market, a trader said Tuesday.

Senior Housing Properties Trust announced a sale of $25-par senior notes due Aug. 1, 2042. The deal priced shortly before the market closed, and pricing came lower than talk.

In other recent deals, Chesapeake Lodging Trust's 7.75% series A cumulative redeemable preferred shares officially listed on the New York Stock Exchange under the ticker symbol "CHSPPA." The deal priced July 10.

In the secondary, Royal Bank of Scotland Group plc preferreds remained the dominant name. As previously reported, chatter is that one large buyer - possibly an exchange-traded fund based in California - has been scooping up the paper ahead of its addition to the S&P U.S. Preferred Stock index later this week.

Senior Housing prices

Senior Housing Properties brought a $350 million issue of 5.625% $25-par senior notes due Aug. 1, 2042 on Tuesday.

Price talk was 5.75% to 5.875%, according to a trader, who also opined that talk could be revised down to around 5.7%.

He saw the paper trading at $24.86 bid, $24.92 offered in the gray market.

The Newton, Mass.-based real estate investment trust will apply to list the notes on the NYSE. Settlement is expected Friday.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers. The joint lead managers are Jeffries & Co. and RBC Capital Markets LLC.

Proceeds will be used to prepay the variable portion of a Federal National Mortgage Association secured term loan, to repay amounts outstanding under a revolving credit facility and for general business purposes, which may include funding possible future acquisitions of properties.

Chesapeake lists

Chesapeake Lodging Trust's new 7.75% series A cumulative redeemable preferreds listed on the NYSE Tuesday under the ticker symbol "CHSPPA."

The issue closed at $25.40, up from opening prices around $25.32.

The underwriters exercised $15 million of the $16.5 million over-allotment option last week, bringing the total issuance to $125 million from $110 million.

Chesapeake is an Annapolis, Md.-based REIT.

Kimco doing well

Kimco Realty Corp.'s new $225 million issue of 5.5% class J cumulative redeemable preferred stock was seen offered at $24.98.

The deal priced Monday and was increased from the minimum of $150 million. Price talk was originally 5.625% to 5.75%. It was then revised to 5.5% to 5.625%, and the issue priced at the tight end of that range.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, UBS and Wells Fargo were the bookrunners.

The New Hyde Park, N.Y.-based REIT will use the proceeds to redeem its 6.65% class F preferreds (NYSE: KIMPF) on or about Aug. 15 and for general corporate purposes.

The called issue traded down a dime to $25.15.

The call price is $25.1385.

RBS trading stays heavy

Royal Bank of Scotland preferreds continued to be all the rage in Tuesday trading.

The 6.4% series M noncumulative dollar preference shares (NYSE: RBSPM) climbed up 13 cents to $19.09. The 7.25% series T preferreds (NYSE: RBSPT) gained 30 cents, or 1.4%, to close at $21.79.

The 6.6% series S preferreds meantime ratcheted up 43 cents, or 2.23%, to $19.70.

RBS is based in Edinburgh.

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