QTS Realty Trust down in gray market; recent preferred stock, baby bond deals weaken

By Abigail W. Adams

Portland, Me., March 8 – The primary market remained active in the preferred space with a new preferred stock offering in the pipeline.

QTS Realty Trust Inc. launched an offering of $25-par perpetual series A cumulative redeemable preferred stock on Wednesday. As of Thursday, the deal had not yet priced, but it was seen trading down in the gray market, a market source said.

While the primary market prepares new paper, the preferred stock and baby bond deals that priced recently were all seen trading down on Thursday.

1347 Property Insurance Holdings Inc.’s 8% series A perpetual cumulative preferred stock, Compass Diversified Holdings’ recently priced 7.875% series B fixed-to-floating rate cumulative preferred shares and CMS Energy Corp.’s 5.625% $25 par notes due 2078 were all down at the market close.

Fannie Mae’s 8.25% series S preferred stock and Freddie Mac’s 8.375% preferreds were in focus on Thursday with both seeing gains in high-volume trading.

In its deal, QTS Realty Trust’s offering of $25-par perpetual series A cumulative redeemable preferred stock is still in the works, but the offering was seen down in the gray market, a market source said. The preferreds were seen at $24.62 to $24.67.

“The gray market is indicating they won’t do so well,” a market source said.

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