CorEnergy, Harvest deals price; Del Monte offering deferred; City National bought by RBC

By Stephanie N. Rotondo

Phoenix, Jan. 22 – There continued to be signs of life in the primary preferred stock market on Thursday.

CorEnergy Infrastructure Trust Inc. brought a $50 million offering of 7.375% series A cumulative redeemable preferred stock.

The deal was led by Wells Fargo Securities LLC, BofA Merrill Lynch and Stifel Nicolaus & Co. Inc.

Just prior to pricing, a trader said the new issue was offered at par in the gray market.

Harvest Capital Credit Corp. meantime sold $25 million of 7% $25-par notes due 2020.

The notes came in line with price talk.

However, market sources said there were no markets for the new securities.

Keefe Bruyette & Woods Inc. and Janney Montgomery Scott LLC were the joint bookrunning managers. JMP Securities LLC and William Blair & Co. LLC were co-managers.

The pipeline was lighter by one deal, however, as Del Monte Pacific Ltd. said it had nixed its planned $360 million offering of preference shares – at least for the time being.

The company cited current market conditions as its reason for putting the new issue on hold. The deal could be back on the table once conditions improve.

Among deals that have already priced, Bank of America Corp.’s $1 billion of 6.5% series Y noncumulative perpetual preferreds were assigned a temporary reporting symbol, according to a trader.

The temporary ticker is “BKMRP.” The deal came Tuesday and freed to trade late Wednesday.

The preferreds closed unchanged from opening levels of $24.85.

CHS Inc.’s $450 million of 7.5% class B series 4 cumulative redeemable preferreds – a deal that priced Jan. 13 –listed on the Nasdaq Global Market under the ticker “CHSCL,” as was expected.

That issue ended at $25.76, down from $25.79 at the open. The preferreds hit an intraday high of $25.88.

In the secondary market, City National Corp. and American Realty Capital Properties Inc. were the in the news, causing some upward movement in their preferred issues.

Overall, the preferred market finished the session in higher territory as the broader markets were buoyed by news that the European Central Bank planed a €1 trillion quantitative easing program to help fight deflation.

The Wells Fargo Hybrid and Preferred Securities index was up 11 basis points.

RBC to buy City National

City National’s preferreds were “all jumping,” a trader said, on news the Los Angeles-based “bank to the stars” was being bought by Royal Bank of Canada for $5.4 billion.

The 5.5% series C noncumulative perpetual preferreds (NYSE: CYNPC) were up 73 cents, or 3.07%, at $24.59. The 6.75% series D fixed-to-floating rate noncumulative preferreds (NYSE: CYNPD) gained 67 cents, or 2.41%, to close at $28.51.

RBC is paying $93.80 per share via a mixture of cash and stock for the bank. The purchase price reflects a 26% premium over Wednesday’s closing share price.

City National also reported earnings on Thursday. For all of 2014, net income was up 11% at $255.8 million.

The bank posted $32.6 billion in total assets, with record loan balances of $20 billion.

American Realty rises

American Realty Capital’s 6.7% series F cumulative redeemable preferreds (Nasdaq: ARCPP) gained in Thursday trading after the company said it had reached a deal with noteholders to avoid a default.

The preferreds moved up a nickel to $22.94.

The New York-based real estate investment trust – which has been jostled by management issues that resulted in the company having to restate some earnings – inked a deal with an ad hoc group of senior noteholders in which the noteholders agreed to forgo serving the company with a default notice for a failure to produce its financial results in a timely manner.

Under the agreement, American Realty has until March 2 to post not only the restated earnings, but its latest quarterly results. Should it fail to do so, noteholders can claim a default on March 3.

The company would then have until March 20 to deliver the results.

Additionally, American Realty said holders of its convertible debt had sent it a default notice pertaining to the same issue.

The company has 60 days to cure that issue or else be found in default.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.