Rexford plans new issue; telecom deal rumored; recent deals trade; GSE court battles eyed

By Stephanie N. Rotondo

Seattle, Aug. 8 – The preferred stock market got the week started with a new issue on Monday.

Rexford Industrial Realty Inc. said it was selling $75 million of series A cumulative redeemable preferreds via BofA Merrill Lynch and Wells Fargo Securities LLC.

Price talk is 6%, a market source said.

A syndicate source said pricing would occur Tuesday morning.

A trader said he hadn’t seen much in the deal, citing the pricing expectations and the facts that the deal is nonrated and is not QDI or DRD eligible.

Looking ahead, the trader said that in addition to the Rexford announcement, there are rumors that a telecom deal is in the works for later in the week.

As for last week’s new issues, Seaspan Corp.’s $225 million of 7.875% series H cumulative redeemable preferreds were pegged at $24.65 bid, $24.72 offered early in the day. They closed at $24.70, off a nickel.

That issue priced Thursday and freed to trade on Friday. It is trading under a temporary symbol, “SSWNP.”

Medley LLC’s $25 million of 6.875% $25-par notes due 2026, however, were still not free as of mid-morning, a trader said.

That issue also priced Thursday.

The trader quoted the notes around $24.65.

Legg Mason Global Asset Management’s $500 million of 5.45% $25-par junior subordinated notes due 2056, a deal from Wednesday, were meantime seen at $24.98 bid, par offered.

GSE preferreds improve

Away from new issues, a trader said Fannie Mae and Freddie Mac preferreds “popped on expectations that we will see something from the courts tomorrow.”

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) traded up 3 cents to $4.33.

The government-sponsored entities are currently embroiled in a number of lawsuits, several of which hinge on the government’s “net worth sweep” amendment, which was enacted in 2012. Under the rule, the entities must send back a majority of their quarterly profits. This has enraged some investors, who say the government is illegally conscripting the funds and misusing its role as conservator.

The profit sweep also makes it difficult for the companies to build up any sort of liquidity cushion, making them vulnerable in the event of another economic crisis.

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