By Stephanie N. Rotondo
Portland, Ore., April 1 - Sunstone Hotel Investors Inc. priced a $100 million offering of 8% series D cumulative redeemable preferred stock on Friday.
There is an over-allotment option for 600,000 preferreds, or $15 million.
The shares were sold at $25 each.
The Aliso Viejo, Calif.-based real estate investment trust announced its intent to sell the preferreds on Tuesday. Price talk had been between 8% and 8½%, according to market sources.
The preferreds have a liquidation preference of $25 per share. Dividends are payable quarterly on the 15th of January, April, June and October.
The company will have the option to call the preferreds beginning April 6, 2016.
J.P. Morgan Securities, LLC, Merrill Lynch and Wells Fargo Securities LLC are the joint bookrunners. The senior co-managers are Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. The junior co-managers are Baird, FBR Capital Markets, KeyBanc Capital Markets LLC and Stifel, Nicolaus & Co. Inc.
Proceeds from the sale will be used to fund growth at the company's Sunstone Hotel Partnership LLC subsidiary. In exchange, the company will receive additional membership units in the operating subsidiary.
Sunstone intends to apply to list the preferreds on the New York Stock Exchange under the ticker symbol "SHO PRD."
| Issuer: | Sunstone Hotel Investors Inc.
|
| Issue: | Series D cumulative redeemable preferred stock
|
| Amount: | $100 million
|
| Shares: | 4 million
|
| Greenshoe: | $15 million, or 600,000 preferreds
|
| Dividend: | 8%, payable quarterly
|
| Price: | $25 per share
|
| Liquidation preference: | $25 per share
|
| Call option: | Beginning April 6, 2016
|
| Joint bookrunners: | J.P. Morgan Securities, LLC, Merrill Lynch and Wells Fargo Securities LLC
|
| Senior co-managers: | Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc.
|
| Junior co-managers: | Baird, FBR Capital Markets, KeyBanc Capital Markets LLC and Stifel, Nicolaus & Co. Inc.
|
| Pricing date: | April 1
|
| Settlement date: | April 6
|
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