Equity LifeStyle may redeem, replace 8.034% perpetual preferreds

By Susanna Moon

Chicago, July 24 - Equity LifeStyle Properties, Inc. said it may redeem for cash some or all of its 8.034% series A cumulative redeemable perpetual preferred stock, or replace the preferreds, as a way to reduce its cost of capital.

The company will begin discussions with potential capital sources and with some holders of the preferreds, according to a press release.

Market conditions would allow the company to issue a new series of preferreds with a lower dividend yield than that of the series A preferreds, the release noted.

As for replacing the preferreds, the company could exercise its right to redeem the series A preferreds at par and fund the redemption with proceeds from a new issuance of lower-yielding preferreds or with other sources of financing, including from its balance sheet.

The other option would be to conduct an exchange offer for newly issued preferreds with a dividend yield of about 6% to 7% with five years of no-call protection. The offer would be conditioned on a minimum tender requirement.

In addition, the company said it may consider other transaction structures as well.

The company noted that there can be no assurance that it will pursue any of these strategies or when or how it would pursue them, given the volatility in the capital markets.

Equity LifeStyle Properties is a real estate investment trust with headquarters in Chicago.

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