Alexandria Real Estate sells new deal, performs well; Kimco plans new issue; Kite Realty firms

By Stephanie N. Rotondo

Portland, Ore., March 8 - Thursday's session was a good one for preferred stocks. New and recent issues were bouncing back and the secondary market was on the rebound.

Alexandria Real Estate Equities Inc. priced a $130 million sale of 6.45% series E cumulative redeemable preferreds. The deal was performing admirably in the gray market, sources reported.

Also in the primary market, Kimco Realty Corp. said it plans to sell class I cumulative redeemable perpetual preferred stock. That deal was also faring well, and pricing was expected to come Friday.

A trader said that the secondary market was "up again for the most part. European insurers and banks were down the most Tuesday, so they have been up the most the last two days."

That proved to be the case Thursday. Issues from Royal Bank of Scotland Group plc to Goldman Sachs Group Inc. headed upward.

Alexandria prices, does well

Pasadena, Calif.-based real estate investment trust Alexandria Real Estate Equities priced $130 million of 6.45% series E cumulative redeemable perpetual preferred stock, the company said Thursday.

The company originally announced the preferred sale on Wednesday. Price talk was around 6.5%.

Alexandria priced 5.2 million preferreds at $25 each, the company said in an FWP filed with the Securities and Exchange Commission. Underwriters received a discount of 78.75 cents per share.

A market source said the deal was "pretty decent," seeing it trading "right around par" in the gray market.

Another source quoted the issue at $25.01 bid, $25.05 offered.

Settlement is expected March 15.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and RBC Capital Markets LLC are the joint bookrunning managers. J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Santander Investment Securities Inc. are the co-managers.

Proceeds will be used to pay down debt under an unsecured line of credit and, pending board approval, to redeem the company's 8.375% series C cumulative redeemable preferred stock (NYSE: AREPC). Those preferreds closed down 12 cents at $25.48.

Kimco plans offering

Kimco Realty will price class I cumulative redeemable perpetual preferred stock, the company said in an SEC filing on Thursday.

A trader said price talk was around 6.125% and that it was expected to price Friday.

"It's doing pretty well," he said, seeing it trade at $24.80 in the gray market.

The company intends to list the preferreds on the New York Stock Exchange.

Bank of America Merrill Lynch, Citigroup, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Proceeds will be used for general corporate purposes, including the reduction of borrowings under a revolving credit facility maturing in October 2015 and the redemption of shares of preferred stock when they become callable.

Kimco is a REIT based in New Hyde Park, N.Y.

Kite Realty firms post-pricing

Late Wednesday, Kite Realty Group Trust priced a $30 million add-on to its 8.25% series A cumulative redeemable perpetual preferreds at $25.1203.

Pricing was at a slight discount to the $25.14 closing share price on Wednesday. The issue (NYSE: KRGPA) closed up 16 cents at $25.30 on Thursday.

The company originally sold $70 million, or 2.8 million, of the preferreds on Dec. 7, 2010.

The underwriters of the add-on have a 30-day over-allotment option to purchase up to $4.5 million more preferreds.

Wells Fargo is the bookrunner. Raymond James & Associates Inc. is the lead manager. Barclays Capital Inc. and KeyBanc Capital Markets Inc. are the co-managers, and Janney Montgomery Scott LLC and City Securities Corp. are the junior co-managers.

Proceeds will be used to repay outstanding debt under a revolving credit facility and for other general corporate purposes, including, without limitation, the acquisition of properties, as well as development and redevelopment costs.

Settlement is expected on Monday.

Kite Realty is an Indianapolis-based REIT.

Recent deals holding in

Also in primary dealings, Raymond James Financial Inc.'s 6.9% $25-par senior notes due 2042 "bounced back," a trader said, pegging the notes at $25.60, versus $25.15 bid, $25.25 offered just two days ago.

Health Care REIT Inc.'s 6.5% series J cumulative redeemable preferreds were meantime hanging around $25.10 bid, $25.15 offered, according to the trader.

At another desk, a market source said Public Storage's 5.75% series T cumulative preferreds were quoted at $24.80 bid, $24.85 offered.

RBS, Goldman rebounding

As the broad market firmed again Thursday, so did the secondary preferred market, particularly European names such as Royal Bank of Scotland.

RBS' 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) moved up 12 cents to $17.89, while the 6.25% series P noncumulative dollar preference shares (NYSE: RBSPP) gained 26 cents, or 1.68%, to close at $15.78.

Goldman Sachs' 6.125% $25-par notes due 2060 (NYSE: GSF) meantime rose 9 cents to $25.43.

And Ally Financial Inc.'s 8.5% series A preferreds (NYSE: ALLYPB) improved by 2 cents, closing at $21.89.

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