Legg Mason prices upsized junior notes offering; Landmark comes with preferred units

By Stephanie N. Rotondo

Seattle, Aug. 3 – Two more new issues were added the preferred stock calendar on Wednesday, with Legg Mason Global Asset Management’s proposed offering of $25-par junior subordinated notes due 2056 and Landmark Infrastructure Partners LP’s planned sale of series B cumulative redeemable preferred units.

Both deals priced before the close, coming upsized.

The market was also still waiting for Medley LLC’s $25 million sale of $25-par unsecured notes due Aug. 15, 2026 to price.

A market source said the deal could come Thursday, though it was originally expected to price Wednesday afternoon.

Among established issues, Freddie Mac’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) were slightly weaker after the mortgage giant reported earnings on Tuesday.

The preferreds dipped 5 cents, or 1.16%, to $4.25.

For the second quarter, Freddie reported a profit of $993 million – well below the $4.17 billion profit posted a year ago.

Under the government’s 2012 “net worth sweep,” Freddie will pay the entire $993 million back to taxpayers in the form of a dividend payment.

Legg Mason upsized

Legg Mason Global Asset Management priced $500 million of 5.45% $25-par junior subordinated notes due 2056 on Wednesday.

The deal came upsized from $150 million. Price talk was in the 5.625% area, according to a market source.

The issue was quoted at $24.95 bid, par offered in the gray market. Post-pricing, a source saw the issue “wrapped around $24.90.”

Morgan Stanley & Co. LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC ran the books.

In the wake of the new deal, Legg Mason’s 6.375% $25-par junior subordinated notes due 2056 (NYSE: LMHA) declined 21 cents to $26.79.

The notes become redeemable on or after Sept. 15, 2021 at par plus accrued interest. The notes can also be redeemed in whole prior to that date upon a tax law change.

Additionally, upon a rating agency event, the notes can be redeemed at 102% of par plus accrued interest.

Proceeds will be used to repay a portion of outstanding borrowings under an existing revolving credit facility and for general corporate purposes.

Legg Mason is a Baltimore-based asset management firm.

Landmark sells units

Around midday, Landmark Infrastructure Partners announced plans to sell $25 million of series B cumulative redeemable preferred units.

The deal priced a few hours later, coming upsized at $40 million. The units were priced at par to yield 7.9%.

Price talk was initially 8% but was later revised to 7.9%.

A market source said the units were offered at $24.98.

UBS Securities LLC, FBR Capital Markets & Co. and RBC Capital Markets LLC were the joint bookrunners. Janney Montgomery Scott LLC and Wunderlich Securities Inc. were the co-managers.

On word of the new deal, the company’s 8% series A cumulative redeemable preferred units (Nasdaq: LMRKP) experienced above-average trading volume, as the securities dropped 25 cents to $25.55.

Distributions will be made on a quarterly basis. The units become callable on Aug. 8, 2021 or upon a change of control at par plus accrued distributions.

Proceeds will be used to repay debt under a revolving credit facility.

Landmark is an El Segundo, Calif.-based master limited partnership that acquires, owns and manages a portfolio of real property interests that are leased to companies in the wireless communication, outdoor advertising and renewable power generation industries.

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