Vornado launches $300 million of $25-par perpetual preferreds at 5.4%

By Andrea Heisinger

New York, Jan. 16 - Vornado Realty Trust has launched a $300 million offering of $25-par series L perpetual cumulative redeemable preferred stock on Wednesday, with pricing expected early Thursday, a source close to the trade said.

Talk at midday was in the 5.5% area, a trader said. The shares were launched at 5.4%, the source said.

Dividends will be payable quarterly on Jan. 1, April 1, July 1 and Oct. 1 beginning on April 1, 2013.

There is a call option on or after January of 2018 at par plus accrued or unpaid dividends.

Bookrunners are Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC.

Co-managers are Barclays, BNY Mellon Capital Markets LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Jefferies & Co. Inc. and J.P. Morgan Securities LLC.

Proceeds will be contributed to the company's operating partnership in exchange for preferred units. The operating partnership will use proceeds for general corporate purposes, including payment of the redemption or repurchase price for preferred stock and units.

Vornado, a real estate investment trust based in New York City, will apply to list the preferreds on the New York Stock Exchange.

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