Midday Commentary: SL Green Realty, Winthrop to price new deals; Kilroy, Prudential doing well

By Stephanie N. Rotondo

Phoenix, Aug. 7 - The preferred stock market saw two new deals enter the marketplace Tuesday.

SL Green Realty Corp. said it will price at least $100 million of series I cumulative redeemable perpetual preferreds. They are talked at 6.5% to 6.625%.

A trader said the deal was "going to do quite well. Retail seems to be snapping it right up."

The trader saw the issue trading at $24.65 in the gray market.

Wells Fargo Securities LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc. and UBS Securities LLC are the joint bookrunners.

Proceeds will be contributed to the company's operating partnership in exchange for an equal number of series I cumulative redeemable preferred units. The operating partnership expects to use all or a portion of the proceeds to redeem all or a portion of outstanding series C preferred stock. Any remaining proceeds may be used to repay outstanding debt and for general corporate purposes.

Winthrop Realty Trust announced plans to price at least $35 million of $25-par senior notes due Aug. 15, 2022.

Price talk is around 7.75%, a trader said, though he noted that he had not seen any markets.

Kilroy, Prudential above par

Kilroy Realty Corp.'s $100 million of 6.375% series H cumulative redeemable perpetual preferreds were trading at $25.01, according to a trader. Prudential Financial Inc.'s $1 billion of 5.875% fixed-to-floating junior subordinated notes due 2042 were offered at 102.

"That did well," a trader said. "Prudential's always a very good name."

Both deals priced Monday.

Freddie Mac up

Away from recent deals, Freddie Mac preferreds were up 25 cents to 35 cents on the back of a $3 billion second-quarter profit.

The government-backed mortgage company also said that it will not need additional federal aid.

Freddie's 8.375% fixed-to-floating-rate noncumulative perpetual preferreds (OTCBB: FMCKJ) rose 30 cents, or 15.23%, at midday to $2.27. The 5.79% noncumulative perpetual preferreds (OTCBB: FMCCK) increased 32 cents, or 11.99%, to $2.99.

"There might be a ray of hope that someday those are worth something," a trader said.

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