Essex to price $130 million convertible preferreds Wednesday, talked at 4.375%-4.875%, up 18%-22%

By Kenneth Lim

Boston, July 20 - Essex Property Trust Inc. plans to price $130 million of convertible preferred shares on Wednesday before the market opens, with talk for a dividend of 4.375% to 4.875% and an initial conversion premium of 18% to 22%, market sources said.

The 5.2 million preferreds are offered at $25 apiece. There is a greenshoe for a further 780,000 preferred shares worth $19.5 million.

Banc of America Securities LLC is the bookrunner of the overnight registered deal.

The preferreds will be non-callable for the first five years, after which they may be called subject to a 130% hurdle.

There will be dividend protection for payouts on the common stock above the current 84 cents per quarter.

Essex, a Palo Alto, Calif.-based real estate investment trust, has a portfolio of residential properties on the West Coast. It will use the proceeds of the deal to pay down its outstanding debt that currently bear a blended interest rate of 5.76%, to fund its development pipeline and for general purposes.

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