Morning Commentary: American Homes 4 Rent prices upsized deal; Hercules to sell more $25-par notes

By Stephanie N. Rotondo

Seattle, June 22 – The preferred stock new issue pipeline continued to flow on Wednesday as American Homes 4 Rent priced a deal and Hercules Capital Inc. announced a reopening of its $25-par notes.

However, a trader said that he heard there would be another new deal, “but they might wait until the Brexit vote.”

The United Kingdom is set to vote on Thursday on whether or not to leave the European Union.

Additionally, the trader noted that Public Storage had said late Tuesday that it was redeeming all of its outstanding 6.35% series R cumulative redeemable preferreds on July 26.

“I don’t know if that is the new deal or not,” he said.

But as for the new issues, American Homes brought $200 million of 6.35% series E cumulative redeemable preferreds.

The deal came upsized from $100 million and tighter than the 6.375% to 6.5% price talk.

Wells Fargo Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and Raymond James & Associates Inc. ran the books.

A trader pegged the issue at $24.92 bid, $24.97 offered in early trading.

Hercules Capital meantime said it was selling more of its 6.25% $25-par notes due 2024 (NYSE: HTGX).

The company has already issued $175,945,000 of the notes via two previous offerings.

The notes were trading off 49 cents, or 1.91%, at $25.60 at mid-morning.

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