Summit Midstream prices $300 million preferred units; primary active; preferreds soften

By Cristal Cody

Tupelo, Miss., Nov. 9 – Summit Midstream Partners, LP tapped the preferred stock primary market on Thursday with a $300 million offering.

Coming up in new deal action, Priority Income Fund, Inc. announced plans to sell term preferred stock.

Also, 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 action on Thursday, Ashford Hospitality Trust Inc.’s $135 million of $25-par series I perpetual cumulative preferred stock that priced on Wednesday with a 7.5% dividend was freed to trade under the temporary symbol “ASHFP.”

The trust sold 5.4 million shares of the preferred stock. The deal includes a greenshoe that would lift the total offering to 6.21 million shares.

The Dallas-based real estate investment trust plans to list the preferreds on the New York Stock Exchange under the ticker symbol “AHTPrI.”

Preferred stocks ended the session weaker.

The U.S. iShares Preferred Stock ETF dropped 5 basis points.

The Wells Fargo Hybrid and Preferred Securities index closed down 16 bps.

Summit prices at 9.5%

Summit Midstream Partners priced $300 million of series A fixed-to-floating rate cumulative redeemable perpetual preferred units (B3/B-) with a 9.5% dividend, according to a news release on Thursday.

The company sold 300,000 of the units at $1,000 per unit.

BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the bookrunners.

The units represent limited partner interests in the partnership.

Dividends will be payable semiannually to but not including Dec. 15, 2022 at the fixed 9.5% rate per annum of the $1,000 liquidation preference. On and after Dec. 15, 2022, the rate for each distribution period will accumulate at a floating rate of Libor plus 743 bps and will be payable quarterly.

Proceeds will be used to repay outstanding debt under Summit’s revolving credit facility.

Summit Midstream, based in the Woodlands, Texas, is an owner and operator of midstream energy infrastructure assets.

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