Preferreds primary active; Ashford Hospitality Trust, MVP price; preferreds close flat

By Cristal Cody

Tupelo, Miss., Nov. 8 – Preferred pricing action is picking up, while preferred stocks overall were mostly flat on Wednesday.

During the session, Ashford Hospitality Trust Inc. priced $135 million of perpetual cumulative preferred shares.

MVC Capital Inc. sold $100 million of “baby bonds” due Nov. 30, 2022 (Egan-Jones: BBB-) at par to yield 6.25%, a source said.

Ladenburg Thalmann & Co. Inc. and BB&T Capital Markets were the bookrunners.

The issue had not freed to trade by the session close, the source said.

Looking ahead, DCP Midstream, LP plans to sell series A fixed-to-floating rate cumulative redeemable perpetual preferred units (B/), according to a prospectus filed with the Securities and Exchange Commission.

In other pricing action, SunTrust Banks, Inc. sold $500 million of depositary shares representing a 1/100th interest in a share of series H fixed-to-floating rate perpetual preferred stock on Tuesday.

The series H preferreds have a fixed-rate dividend of 5.125% to but excluding Dec. 15, 2027. Thereafter until the redemption date, if any, the rate will convert to a floating rate of Libor plus 278.6 basis points.

SunTrust Banks’ preferreds traded on Wednesday at 100.125, a source said.

Preferreds recovered some of the early morning losses over the day.

The Wells Fargo Hybrid and Preferred Securities index closed up 2 basis points. The index was down 9 bps at the start of the session.

The U.S. iShares Preferred Stock ETF rose 18 bps on the day. The ETF was 12 bps better early Wednesday.

“The market closed flat for the day, after being off in the morning,” a source said.

AT&T Inc.’s 5.35% $25-par global notes due Nov. 1, 2066 closed up 6 cents, or 0.24%, to $25.40.

The Dallas-based telecommunications company sold $1.15 billion of the notes on Oct. 25.

Ashford Hospitality prices

Ashford Hospitality Trust priced $135 million of $25-par series I perpetual cumulative preferred stock with a 7.5% dividend on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The trust sold 5.4 million shares of the preferred stock.

The liquidation preference is $25.00 per preferred.

Morgan Stanley & Co. LLC and UBS Securities LLC were the bookrunners.

The deal includes a greenshoe that would lift the total offering to 6.21 million shares.

The company plans to list the preferreds on the New York Stock Exchange under the ticker symbol “AHTPrI.”

Proceeds from the deal will be used for general corporate purposes, including redemption of the company’s 8.45% series D preferreds; acquisitions of additional properties or hospitality-related investments, capital expenditures and debt repayment.

Ashford is a Dallas-based real estate investment trust.

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