Pebblebrook prices upsized preferreds; Ares details units sale; Reinsurance Group frees up

By Stephanie N. Rotondo

Seattle, June 2 – The primary preferred stock market continued to push out new deals on Thursday.

“We are probably going to see a strong calendar for the rest of the week,” a trader said.

Pebblebrook Hotel Trust brought $125 million of 6.375% series D cumulative redeemable preferred stock, upsizing from $100 million.

The non-rated, perpetual deal was talked in the 6.5% area.

Ahead of pricing, a trader saw a $24.80 bid for the paper in the gray market. He noted that there was no selling group on the transaction.

Post-pricing, the trader quoted the issue at $24.90 bid, par offered.

BofA Merrill Lynch, Raymond James & Associates Inc. and Wells Fargo Securities LLC are leading the deal.

Meanwhile, Ares Management LP gave details on its sale of $275 million of 7% series A preferred units on Thursday.

The issue priced late Wednesday, coming tight to the 7% to 7.125% price talk.

A trader said the deal had freed from the syndicate, trading at $24.60 bid, $24.68 offered.

Anther market source saw the paper ending at $24.65.

Morgan Stanley & Co. LLC, BofA Merrill Lynch and Wells Fargo ran the books.

Also freed to trade were Reinsurance Group of America Inc.’s $400 million of 5.75% $25-par fixed-to-floating rate subordinated debentures due 2056, another deal priced on Wednesday.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Wells Fargo and HSBC Securities (USA) Inc. were the joint bookrunners.

A trader saw the paper bid for at $25.65.

“That did very well,” he said.

At the bell, a source said the notes were bid for at $24.85, “but no real offers.”

As for deals from last week, Hersha Hospitality Trust’s $175 million of 6.5% series D cumulative redeemable perpetual preferred stock listed on the New York Stock Exchange on Thursday under the ticker “HTPD.”

The preferreds were trading at $24.87 at mid-morning, up from opening levels of $24.85. However, the paper came in a bit to close at $24.86.

The deal priced May 24.

Also listed were Gabelli Utility Trust’s $50 million of 5.375% series C cumulative preferred shares, which was a deal that priced May 25. The ticker is “GUTPC.”

Those preferreds were seen at $25.35 at mid-morning and at $25.36 at the close. That compared to $25.10 at the open.

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