Morning Commentary: Public Storage, Chimera add deals to pipeline; Bluerock, Eagle Point price

By Stephanie N. Rotondo

Seattle, Oct. 6 – The preferred stock primary market was hopping early Thursday, with two new deals getting added to the calendar.

Public Storage announced plans to sell $100 million of series E cumulative preferreds.

Price talk was 4.9%, according to a market source.

A trader saw the issue at $24.60 bid, no offers in the early gray market, though that soon moved up to $24.80 bid.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are running the books.

Chimera Investment Corp. also commenced a deal, a $75 million offering of series A cumulative redeemable preferreds.

Price talk on the non-rated deal is 8% to 8.125%, a source said.

“It’s pretty standard language for a mortgage-backed REIT, nothing goofy,” a trader said. However, he had yet to see any gray markets for the preferreds.

Morgan Stanley, UBS, Keefe Bruyette & Woods Inc. and RBC Capital Markets are the bookrunners.

As for priced deals, Bluerock Residential Growth REIT Inc.’s $67.5 million of 7.125% series D cumulative preferred stock was seen at $24.85 bid, $24.87 offered at mid-morning.

The deal came late Wednesday via Janney Montgomery Scott LLC, D.A. Davidson & Co. and Oppenheimer & Co. Price talk was 7%.

Eagle Point Credit Co. Inc. also priced a deal late Wednesday, though there was little activity in the new issue come Thursday.

The Greenwich, Conn.-based closed-end fund sold $30 million of 7.75% series B term preferred stock due 2026, the company said in a press release.

There is a $4.5 million over-allotment option.

The deal came upsized from $25 million. The greenshoe was also increased from $3.75 million.

Keefe Bruyette was the bookrunner.

From Tuesday’s business, National Retail Properties Inc.’s $300 million of 5.2% series F cumulative redeemable preferreds were quoted at $24.97 bid, $24.99 offered.

The deal freed to trade on Wednesday. Initial price talk was 5.25%. Wells Fargo, BofA Merrill Lynch and Morgan Stanley ran the books.

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