Summit Hotel, Medley Capital bring new upsized issues; PPL Capital's deal frees to trade

By Stephanie N. Rotondo

Phoenix, March 13 - A preferred stock trader said the market was "strangely quiet" on Wednesday, despite two more new issues hitting the tape.

"There was high volume in agency preferreds and newer issues; then it falls off dramatically," another market source said.

Of the new deals, Summit Hotel Properties Inc. announced an offering of at least $60 million of series C cumulative redeemable preferreds, talked around 7.25%. Medley Capital Corp. meantime said it would sell at least $40 million of senior notes due 2023.

Price talk on that issue was around 6.375%.

Both issues priced late in the day, with Summit selling $75 million series C redeemable preferreds at par to yield 7.125%. Medley came with $60 million notes due 2023 at 6.125%.

However, sources reported not seeing much going on in either issue, likely due to their small size.

Summit, Medley price

"I don't see them doing much," a trader remarked of the new issues, pointing to their small size.

Another source said there was "not much of a gray market going on" for the securities.

Proceeds from both offerings will be used to pay down revolving credit facilities.

New deals take focus

In other recent deals, PPL Capital Funding Inc.'s new $400 million issue of 5.9% $25-par 2013 series B junior subordinated notes due April 30, 2073 - a deal that priced Tuesday - had freed early in the day's session, according to a trader.

He quoted the issue at $25.05 bid, $25.10 offered.

Meanwhile, Astoria Financial Corp.'s $135 million of 6.5% series C noncumulative perpetual preferreds - another deal from Tuesday - was pegged at $24.75 bid, $24.85 offered.

A market source said that Prudential Financial Corp.'s $650 million of 5.7% $25-par junior subordinated notes due March 15, 2053 - a deal that priced March 7 - was dominating trading, with over 3.1 million of the baby bonds changing hands.

He called the issue up 12 cents at $24.95.

Also, Taubman Centers Inc.'s $150 million of 6.25% series K cumulative redeemable preferred stock made the day's most active list as well.

However, a source said the paper was flat at $24.83.

The issue priced on Monday.

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