Morning Commentary: Monmouth REIT announces add-on offering; PennyMac, Apollo Global improve

By Colin Hanner

Chicago, March 6 – As the preferred stock market opened generally lower to even higher expectations of an interest hike within the next 10 days, the overall tone was quiet on Monday morning, a trader said, though a real estate investment trust announced it was offering an add-on to its preferred stock.

The Wells Fargo Hybrid and Preferred Securities index was down 6 basis points at mid-morning, while the U.S. iShares Preferred Stock index was down 4 bps.

Monmouth Real Estate Investment Corp. announced Monday that it will sell an add-on to its 6.125% series C cumulative redeemable preferreds (NYSE: MNRPrC), which were down 31 cents, or 1.23%, to $24.63. The issuer will use the proceeds to call its 7.875% series B cumulative redeemable preferreds (NYSE: MNRPrB). Thoese preferred fell 10 cents, or 0.39%, to $25.40.

The remaining proceeds will be used to reduce the outstanding amount under its unsecured revolving credit facility, to purchase properties and fund expansions of existing properties and for general corporate purposes.

RBC Capital Markets, BMO Capital Markets and JPMorgan will run the books.

A trader said he heard there was a possibility of a couple of deals this week but had not heard any names yet.

In recently priced deals, PennyMac Mortgage Investment Trust’s upsized $115 million of 8.125% series A fixed-to-floating rate cumulative redeemable preferreds were trading with a $24.55 bid, $24.65 offer, a trader said.

And Apollo Global Management LLC’s $250 million of 6.375% series A preferreds – trading under the temporary ticker “APLMP” – were quoted at $24.85 bid, $24.92 offer.

In the secondary market, GMAC Capital Trust I’s 8.125% series 2 fixed-to-floating rate preferreds (NYSE: ALLYPrA) were up 1 cent, or 0.04%, to $25.74.

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