Morning Commentary: Capital Southwest to price $25-par notes; Vornado, Kimco preferreds soften

By Cristal Cody

Tupelo, Miss., Dec. 12 – Capital Southwest Corp. announced on Tuesday the company is marketing a $35 million offering of $25-par notes due 2022.

In other deal action, Vornado Realty Trust plans to price notes due 2025 following the company’s $300 million sale on Dec. 4 of $25-par 5.25% split-rated series M cumulative redeemable perpetual preferred stock.

The New York-based equity real estate investment trust had planned to price the bonds on Dec. 4 but stood down with the deal, a source said. Vornado held fixed income investor calls on Friday for the bond offering.

Vornado Realty Trust’s 5.25% series M cumulative redeemable perpetual preferred stock (Baa3/BBB-/BB+) was quoted flat at $24.78 in mid-morning trading.

The preferred stock is trading over the counter under the temporary symbol “VNNDP.”

On Monday, Kimco Realty Corp. priced $230 million of 5.25% $25-par class M cumulative redeemable preferred shares.

The deal was upsized from $150 million, and the 5.25% perpetual preferreds were initially talked to price in the 5.25% to 5.3% area, a source said.

Kimco’s preferreds, which freed to trade over the counter under the temporary symbol “KMCCP,” were flat at $24.75 at the start of Tuesday’s session.

Elsewhere in the preferred stock market early Tuesday, preferreds overall were weaker.

The Wells Fargo Hybrid and Preferred Securities index fell 7 basis points.

The U.S. iShares Preferred Stock ETF also dropped 7 bps over the morning.

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