Ashford prices upsized issue; Cedar Realty comes at wide end of talk; Stellus taps market

By Stephanie N. Rotondo

Seattle, Aug. 16 – The deals continued to flow into the preferred stock market on Wednesday, with three offerings hitting the tape.

Ashford Hospitality Trust Inc. announced – and priced – an $85 million offering of 7.5% series H cumulative preferred stock.

Initial price talk was in a range of 7.5% to 7.625%.

The deal came upsized from $50 million

UBS Securities LLC and Morgan Stanley & Co. LLC are the joint bookrunners.

The company plans to use proceeds to, among other things, redeem some or all of its 8.55% series A cumulative preferreds (NYSE: AHTPrA) or its 8.45% series D cumulative preferreds (NYSE: AHTPrD).

In response, the series A preferreds were off 32 cents, or 1.23%, at $25.41. The series D paper was down 15 cents at $25.45.

Cedar Realty Trust Inc. also added a deal to the calendar, a $75 million sale of 6.5% series C cumulative redeemable preferred stock.

Price talk was 6.375% to 6.5%, according to a market source.

Raymond James & Associates Inc. and KeyBanc Capital Markets are running the books.

Like Ashford, the company intends to use the funds to redeem an outstanding issue, the 7.25% series B cumulative redeemable preferreds (NYSE: CDRPrB).

That issue was off 8 cents, trading at $25.11.

And, Stellus Capital Investment Corp. said it sold $42.5 million of 5.75% $25-par notes due 2022.

The deal came in line with price talk but was upsized from $30 million.

Keefe Bruyette & Woods Inc. is the bookrunner.

The Houston-based business development company said it would use proceeds to redeem its 6.5% $25-par notes due 2019 (NYSE: SCQ).

The notes were off 41 cents, or 1.61%, at $25.10.

Recent deals remain in play

Investors continued to focus on recently priced issues in midweek trading.

From Tuesday’s business, AGNC Investment Corp.’s $300 million of 7% series C fixed-to-floating rate cumulative redeemable preferred stock topped the day’s activity, with almost 3.75 million shares being exchanged.

The issue freed to trade shortly before lunchtime, moving under the temporary ticker “AGNNP.”

The paper closed at $24.85, up 22 cents.

Price talk is 7% to 7.125%.

The size of the deal was increased from $150 million.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC, J.P. Morgan Securities LLC, RBC Capital Markets LLC and Keefe Bruyette & Woods are running the books.

The company intends to use come of the deal’s proceeds to redeem all of its 8% series A cumulative redeemable preferreds (Nasdaq: AGNCP).

As for Monday’s only new deal, Arch Capital Group Ltd.’s $200 million of 5.45% series F noncumulative preferreds were deemed 3 cents better at $24.85.

The issue has a temporary symbol, “AHCCF.”

The deal came in line with revised price talk. Initial price talk was 5.5%.

The issue was also increased from an expected $150 million.

BofA Merrill Lynch, Morgan Stanley, Wells Fargo Securities LLC and JPMorgan are the bookrunners.

Among last week’s deals, Cherry Hill Mortgage Investment Corp.’s $55 million of 8.2% series A cumulative redeemable preferreds continue to move toward par, adding a nickel to close at $24.85.

The deal priced on Thursday. A temporary ticker of “CHMMP” was given to the issue on Friday after the deal freed from the syndicate.

The company’s inaugural issue came tighter than the 8.25% price talk.

Morgan Stanley and RBC Capital Markets were the bookrunners.

Invesco Mortgage Capital Inc.’s $250 million of 7.5% fixed-to-floating rate series C cumulative redeemable preferred stock – a deal priced Aug. 11 – were meantime seen hitting par, a gain of 5 cents.

That issue also has a temporary symbol, “IVSOP.”

The deal came at the tight end of the revised 7.5% to 7.625% price talk. Initially, price talk was 7.625%.

Morgan Stanley, BofA, UBS Securities and JPMorgan ran the books.

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