Pimco funds see outflows; Qwest $25-par senior notes tick up; Pebblebrook returns for more

By Christine Van Dusen

Atlanta, Sept. 29 – Funds continued to flow out of Pacific Investment Management Co. LLC (Pimco) on Monday as investors digested the news that the asset management company’s co-founder, Bill Gross, had left to work for Janus Capital Group.

Gross surprised the markets on Friday by announcing he would leave California-based Pimco, which manages $2 trillion in assets and has seen more than $10 billion flow out since the personnel change came to light.

“We’re seeing some of the Pimco funds dropping off, with an outflow of cash because of Gross leaving,” a trader said.

In other news on Monday morning, Qwest Corp.’s new $500 million issue of 6 7/8% $25-par senior notes due 2054 were trading at $24.40, following Friday’s low of $24.35.

The Monroe, La.-based telecommunications company has two 7% issues coming due in 2052, one in April and one in July. Both were recently spotted trading above par.

“I hear there could be a full calendar, but with the Qwest trading at these levels, we may let the secondary market firm up before we bring out new issues,” the trader said.

Also on Monday, RBS Capital Funding Trust VII’s 6.08% noncumulative guaranteed trust preferred securities traded down 3 cents at $23.89.

Barclays Bank plc’s 8 1/8% non-cumulative callable dollar preference shares, series 5 ADR, were seen moving down 7 cents to $25.981.

And Wells Fargo & Co.’s 8% depository shares non-cumulative perpetual CI A preferred stock, series J, dropped 10 cents to $28.85.

Preferreds move up at close

At the close on Monday, Bank of America’s floating-rate non-cumulative preferred stock, series 5, ticked up a penny to finish at $21.23 on 255,854 shares traded.

Royal Bank of Scotland’s 6 1/8% noncumulative dollar preference shares, series R ADR, closed up 7 cents at $23.78 on 246,021 shares traded.

And Morgan Stanley Capital Trust VII ended the day at $25.15, up 5 cents on 176,525 shares traded.

Pebblebrook details issuance

Maryland’s Pebblebrook Hotel Trust detailed its sale of an additional $25 million of its 6.5% series C cumulative redeemable preferred shares at a liquidation preference of $25.00 per share, according to a company filing.

Wells Fargo Securities is the underwriter for the Securities and Exchange Commission-registered deal.

The company originally sold $90 million of the securities in March with Raymond James & Associates Inc. and Citigroup Global Markets Inc. as the joint bookrunners. A $10 million greenshoe was exercised in April, lifting the deal to $100 million.

Dividends are payable on the 15th day of January, April, July and October. The preferreds become redeemable on or after March 15, 2018 at par plus accrued dividends or in the event of a change of control.

Proceeds from the offering will be contributed to the operating partnership, which will then use the funds for general corporate purposes, including acquiring and investing in hotel properties and reducing debt.

Pebblebrook is a Bethesda, Md.-based real estate investment trust focused on hotel management.

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