Upsized Digital Realty deal comes tight; Eagle Point bonds free; Public Storage active

By Stephanie N. Rotondo

Seattle, Aug. 2 – Another deal stepped into the preferred stock market on Wednesday as Digital Realty Trust Inc. priced an upsized $200 million issue of 5.25% series J cumulative redeemable preferreds.

Price talk was 5.375%, according to a market source. The deal size was increased from $100 million.

At the end of the day, a source said the paper was “wrapped around $24.75.”

The paper was pegged at $24.70 bid in the gray market at mid-morning.

BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are the joint bookrunners.

The issue becomes redeemable on Aug. 7, 2022 or upon a change of control at par plus accrued dividends.

The preferred stock offering is being done concurrently with a two-tranche sale of bonds. Proceeds from both deals will be used to fund a portion of the repayment, redemption and/or discharge of DuPont Fabros Technology Inc. debt, as well as certain fees and expenses from the merger with DuPont.

As for the week’s other new issues, Eagle Point Credit Co. Inc.’s 6.75% $25-par notes due 2027 – a $27.5 million deal priced late Tuesday – were seen at $25.11 at the close.

Earlier in the day, the notes were quoted at $25.10 bid, $25.20 offered.

The issue freed to trade during the session, according to a trader.

The deal came upsized from $25 million. The coupon was tighter than the 6.875% price talk.

Ladenburg Thalmann & Co. Inc. is the bookrunner. FBR Capital Markets & Co., Oppenheimer & Co. Inc. and National Securities Corp. are acting as lead managers.

Public Storage’s $300 million of 5.05% series G cumulative preferreds – a deal priced Monday – were again the most actively traded issue of the day.

The preferreds finished the day unchanged at $24.75, on about 1.41 million shares traded. The issue was up a dime at $24.85 at mid-morning.

The issue freed to trade on Tuesday and is trading under a temporary ticker symbol, “PBSTP.” The deal priced Monday.

Annaly Capital Management Inc.’s $700 million of 6.95% series F fixed-to-floating rate cumulative redeemable preferred stock (NYSE: NLYPrF) – a deal priced on July 25 – were also on the busier side, trading about 1.08 million times.

The preferreds ended the day up 3 cents at $24.83. However, that was down from Wednesday’s opening levels of $24.86.

The deal came tighter than the initial price talk of 7% to 7.125%. The issue was also upsized from $200 million.

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