Hoegh LNG Partners upsizes sale of preferred units; Stifel’s new $25-par notes hit par

By Stephanie N. Rotondo

Seattle, Sept. 28 – Yet another deal entered the preferred stock market on Thursday, an upsized $100 million issue of 8.75% series A cumulative redeemable preferred units from Hoegh LNG Partners LP.

Price talk was 8.75% to 8.875%, according to a market source. The deal was increased from an expected $50 million.

Morgan Stanley & Co. LLC, UBS Securities LLC and Stifel Nicolaus & Co. Inc. are the joint bookrunners.

The units become redeemable on Oct. 5, 2022 at par plus accrued distributions.

The units will be listed on the New York Stock Exchange under the ticker symbol “HMLPPrA.”

The Bermuda-based owner and operator of LNG carriers intends to use $34.4 million of the deal’s proceeds to repay the 8% seller’s credit note related to the Höegh Gallant acquisition. The remainder of the funds will be used for general partnership purposes, which may include the repayment of additional debt or funding of acquisitions – including the potential acquisition and/or purchase of the 49% interest in Höegh LNG Colombia Holding Ltd., over which the company has a right of first offer – or other capital expenditures.

As for deals that have already priced, Stifel Financial Corp.’s $200 million of 5.2% $25-par notes due 2047 – a deal that priced late Wednesday – were seen closing at $25.02.

The paper was quoted at $24.95 bid, par offered in early Thursday trading.

The issue also freed to trade.

The deal came tighter than the 5.25% to 5.75% price talk and was upsized from $100 million.

Keefe Bruyette & Woods Inc., BofA Merrill Lynch and Morgan Stanley ran the books.

From Tuesday’s business, Horizon Technology Finance Corp.’s $32.5 million of 6.25% $25-par notes due 2022 continued to do well, trading up to $25.35.

The notes were seen at $25.20 bid in early dealings, according to a trader.

Keefe Bruyette & Woods was the bookrunner on the deal.

Spirit Realty Capital Inc.’s $150 million of 6% series A cumulative redeemable preferreds – another deal priced Tuesday – were meantime off 4 cents at $24.96.

The issue freed to trade on Wednesday and has a temporary ticker, “SPRYP.”

The deal came in line with price talk. The sale marks the company’s first entry into the world of preferred stock.

Morgan Stanley, BofA Merrill Lynch and Wells Fargo Securities LLC ran the books.

Also from Tuesday, Investors Real Estate Trust’s $100 million of 6.625% series C cumulative redeemable preferreds were pegged at $24.72, down 3 cents.

The issue has a temporary ticker of “IRRTP.”

BMO Capital Markets and Raymond James & Associates Inc. were the bookrunners.

Rounding out the week’s new issues, Federal Realty Investment Trust’s $150 million of 5% series C cumulative redeemable preferreds dipped 8 cents to $24.65.

The issue priced Monday. Its temporary symbol is “FDDRP.”

BofA Merrill Lynch, UBS Securities LLC and Wells Fargo led the books.

Gladstone lists

Gladstone Capital Corp.’s 6% series 2024 term preferred stock listed on the Nasdaq Global Select Market on Thursday.

The ticker symbol is “GLADN.”

The paper finished the day at $25.20, up a dime.

The company sold $45 million of the preferreds on Sept. 19. On Wednesday, the company said its $6.75 million greenshoe had been fully exercised, bringing the total amount outstanding to $51.75 million.

Janney Montgomery Scott LLC and Ladenburg Thalmann & Co. Inc. were the joint bookrunners.

The preferreds are mandatorily redeemable in September 2024 at par.

The proceeds from the preferred tock sale, as well as credit facility borrowings, will be used to redeem all of the outstanding 6.75% series 2021 term preferred stock.

Gladstone is a McLean, Va.-based business development company.

Secondary up, but not GSEs

Overall, the preferred stock market had an unchanged to positive tone on Thursday, according to market indicators.

The Wells Fargo Hybrid and Preferred Securities index ended the day 10 basis points better. However, the U.S. iShares Preferred Stock ETF was flat.

Despite the somewhat firm feel of the day, Fannie Mae and Freddie Mac preferreds were in retreat.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were off 7 cents, or 1.0%, at $6.90.

Over 3.28 million of the preferreds changed hands.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were down 12 cents, or 1.75%, at $6.73.

Over 1.1 million of those preferreds were exchanged.

The weakness came in the wake of reports that senator Bob Corker – a name often associated with GSE and housing reform, given his sponsorship of the Warner-Corker bill – announced that he would not be seeking re-election.

Corker’s bill has failed to gain the traction necessary to get reform moving, but it has come the closest of any of the multiple bills presented. But Steven Mnuchin, Treasury Secretary, has also indicated that housing reform won’t even be on the table until early in 2018 – this despite promises by both Mnuchin and the Trump Administration that such reform would be done by August of 2017.

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