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The other day (August 6th to be exact), I wrote an article with Brad Thomas on Regency Centers Corp (NYSE:REG) (Brad's part 1 here, my part 2 here) in which I stated:

Regency's Series 6 preferred is the preferred choice among the larger peer preferred as it has a higher yield and 4.5 years of call protection. Its Series 5 has a higher yield, but it is currently callable and close to a viable call.

I did not, at that time, know how close that call was. On Monday, while trolling through new SEC filings (a bad habit of mine), I found out the call is coming as the REIT announced a new preferred stock offering whose proceeds would be used to redeem the Series 5. Psychic? Hardly. Anyone following the preferred stock market or reading my articles (or both), know that its refi time at the REIT preferred stock emporium. As we have just written on this stalwart shopping REIT, this article will focus on the new issue and its valuation (my subtle sledgehammer approach).

Details of the new offering are:

IssuerRegency Centers Corp
RatingsBaa3/BB+ (existing and expected)
IssueSeries 7 Cumulative Redeemable Preferred Stock
Coupon
Size
Call DateAugust 2017
DividendsMarch 31, June 30, September 30 and December 31
Change of Control ProvisionRedemption and/or Conversion
Use of ProceedsRedeem all of the issued and outstanding shares of the company's 6.70% Series 5 preferred shares
Voting RightsIf dividends are suspended for 6 quarters, the preferred stock holders can elect 2 additional directors
UnderwritersJPMorgan, Wells Fargo and RBC Cap Markets

Initial Prospectus

Issuer Description:

Regency is one of the largest national owner, operator, and developer of dominant grocery-anchored and community shopping centers. On June 30, 2012, the company owned 364 retail properties, including those held in co-investment partnerships. Including tenant-owned square footage, the portfolio encompassed 49.5 million square feet located in top markets throughout the United States. Since 2000, Regency has developed 209 shopping centers, including those currently in-process, representing an investment at completion of more than $3.0 billion.

Relative Value:

To determine relative value, I have compared existing Regency Centers, Weingarten Realty (NYSE:WRI), Kimco Realty (NYSE:KIM), Inland Real Estate (NYSE:IRC), Realty Income (NYSE:O) and Vornado Realty (NYSE:VNO).

(click to enlarge)

Due to where new issues have been pricing, I would look at the Kimco Series J and Vornado Series K as pricing comparables. These trade around 5.70%, so if I tack a concession on these, I would cuff the new Regency's at 5.90%ish.

Bottom Line: As with most recent new issue REIT preferred stocks, this will come tighter than where investors would like it, but that is were the market is. The new issue discount should allow investors to pick this up a little cheap to where I think it will price (5.90%). It might be worth buying the REGPrF, as they will be cheap to the new issue.

Disclaimer: This article is for informational purposes only, it is not a recommendation to buy or sell any security and is strictly the opinion of Rubicon Associates LLC. Every investor is strongly encouraged to do their own research prior to investing.

Source: Regency Centers: The REIT Refi-O-Rama Continues