Midday Commentary: Senior Housing Properties plans deal; Kimco faring well; Chesapeake lists

By Stephanie N. Rotondo

Phoenix, July 17 - Recent deals continued to perform well in the preferred stock market, a trader said Tuesday.

Senior Housing Properties Trust announced plans for a sale of $25-par senior notes due Aug. 1, 2042. Price talk is 5.75% to 5.875%, according to a trader.

He saw the paper trading at $24.86 bid, $24.92 offered in the gray market.

"It's a small deal, no selling group," he said. "It will probably price tonight, I'm guessing."

Additionally, he opined that price talk could be revised to around 5.7% given how well the notes are already trading.

The Newton, Mass.-based real estate investment trust will apply to list the notes on the New York Stock Exchange.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers. The joint lead managers are Jeffries & Co. and RBC Capital Markets LLC.

Proceeds will be used to prepay the variable portion of a Federal National Mortgage Association secured term loan, to repay amounts outstanding under a revolving credit facility and for general business purposes, which may include funding possible future acquisitions of properties.

Meanwhile, Kimco Realty Corp.'s new $225 million issue of 5.5% class J cumulative redeemable preferred stock was seen offered at $24.98.

The deal priced Monday and was increased from the minimum of $150 million. Price talk was originally 5.625% to 5.75%. It was then revised to 5.5% to 5.625%, and the issue priced at the tight end of that range.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, UBS and Wells Fargo were the bookrunners.

The New Hyde Park, N.Y.-based real estate investment trust will use the proceeds to redeem its 6.65% class F preferreds (NYSE: KIMPF) on or about Aug. 15 and for general corporate purposes.

The called issue traded down midday Tuesday, falling 6 cents to $25.19.

The call price is $25.1385.

In other recent deals, Chesapeake Lodging Trust's 7.75% series A cumulative redeemable preferred shares, which priced July 10, officially listed on the NYSE under the ticker symbol "CHSPPA."

The preferred stock was trading at $25.44 at midday.

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