Morning Commentary: Colony NorthStar offers $100 million perpetual preferreds; new deals eyed

By Colin Hanner

Chicago, May 24 – Yet another new issue came out of the preferred market pipeline on Wednesday morning, ticking the total for new issues to three for the week.

Colony NorthStar, Inc. plans to price $100 million of series I cumulative redeemable perpetual preferred stock, according to a prospectus filed with the Securities and Exchange Commission on Wednesday.

Price talk is in the 7.25% area, a market source said.

“It’s a small deal, probably not much of a selling group on it,” a market source said. “I think it should do well.”

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC are joint bookrunners for the offering.

Citigroup Global Markets Inc. and Keefe, Bruyette & Woods, Inc. are the co-managers.

Dividends will be payable quarterly. The preferreds become redeemable in June 2022 at par plus accrued dividends. The issue can also be called upon a change of control.

The new securities will be listed on the New York Stock Exchange under the ticker symbol “CLNSPrI.”

Proceeds of the offering will go toward redeeming some or all of the shares of its 8.75% series A cumulative redeemable perpetual preferred stock and its outstanding 8.5% series F cumulative redeemable perpetual preferred stock, as well as for other general corporate purposes.

The company’s existing series A preferreds (NYSE: CLNSPrA) were down 13 cents, or 0.51%, to $25.21, while the series F preferreds (NYSE: CLNSPrF) were down 10 cents, or 0.39%, to $25.40 in the secondary market at mid-morning.

Elsewhere in the new deal space, Public Storage’s $250 million issue of 5.15% series F cumulative preferreds were trading at $24.85 bid, $24.95 offered, a market source said.

That deal is expected to list on the NYSE under the ticker symbol “PSAPrF.”

And B. Riley Financial Inc.’s $52.5 million sale of 7.5% $25-par senior notes due 2027 (Nasdaq: RILYL), which “has not freed yet,” was trading around $24.75.

The new securities will be listed on the Nasdaq Global Select Market.

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