KKR prices $100 million baby bonds; Colony brings preferreds; AXIS, Kimco Realty seen trading

By Andrea Heisinger

New York, March 13 - KKR Financial Holdings LLC and Colony Financial, Inc. priced new deals on Tuesday, continuing the string of preferred stock issuance.

KKR sold $100 million of $25-par 30-year notes that were put away in retail right away, a source said.

Colony priced $130 million of perpetual shares at the tight end of guidance.

AXIS Capital Holdings Ltd.'s new $400 million of noncumulative perpetual preferreds were seen trading. They sold at par of $25 on Monday.

A trader said he saw the new Kimco Realty Corp. 6% perpetual preferreds trading in to $24.80 from their price of $25.00.

"We're still pretty active in the new issue market, but not a whole lot's happening in trading," a source said early in the afternoon.

The results of a Federal Reserve bank stress test on 19 bank holding companies, including JPMorgan Chase & Co., were announced two days earlier than expected and right around the market close, a trader said, leaving everyone scrambling. JPMorgan passed its test.

KKR's baby bonds

KKR Financial sold $100 million of 7.5% 30-year senior notes at par of $25, an informed source said.

The notes (/BBB-/BBB) are callable on or after March 20, 2017 at par and feature a change-of-control put at 101.

They were being bid on the Street at $24.25 as of early afternoon, but no offers had been seen. They won't be freed for secondary trading until Wednesday, a trader said.

There is a $15 million over-allotment option.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC were the bookrunners. The co-managers were KKR Capital Markets LLC and RBC Capital Markets LLC.

Proceeds are being used for general corporate purposes.

The specialty finance company is based in San Francisco.

Colony sells $130 million

Colony Financial priced $130 million, or 5.2 million shares, of 8.5% perpetual series A cumulative redeemable preferred stock at a liquidation preference of $25, according to an FWP filing with the Securities and Exchange Commission.

The preferreds sold at the low end of Monday's guidance between 8.5% and 8.625%. The deal was upsized from $75 million, or 3 million shares.

There is a $19.5 million over-allotment option.

Barclays Capital Inc., Bank of America Merrill Lynch, Morgan Stanley and UBS were the bookrunners. The co-managers were RBC and Stifel Nicolaus & Co. Inc.

Dividends are payable quarterly starting July 16.

There is a call option beginning March 20, 2017 at $25 plus accrued dividends and also a change-of-control call.

Proceeds are being used to repay amounts under a revolving credit facility, to acquire target assets, for working capital and for general corporate purposes.

Colony is a real estate investment and financing company based in Santa Monica, Calif.

AXIS trades out

AXIS Capital Holdings saw its $400 million of 6.875% perpetual noncumulative preferreds, series C, trade slightly wider from where they priced, a source said.

A trader quoted them at $25.25 early in the day.

The preferreds sold for $25.00 each. Dividends will be paid quarterly starting July 15.

There is a call option on or after April 15, 2017 at $25 plus accrued dividends.

Wells Fargo Securities LLC was the bookrunner.

Proceeds are being used to repurchase series B preferreds in a tender offer.

The holding company for reinsurance subsidiaries is based in Pembroke, Bermuda.

© 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.