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DDR Issuing New Series J Preferred

|Includes:DDR Corp. (DDR)

Joining the preferred parade is DDR. The REIT is doing $175MM (7MM shares) of a Series J preferred in order to redeem the Series I 7.50% preferred (which I have been long since $7 - in a taxable account unfortunately).

Details are:

DDR Corp

Series J

$175,000,000 size (7MM shares)

Ba1/B-

Change of control conversion and/or redemption

Valuation:

DDR Series H 7.375%: $25.10 current yield:7.27%

KIM Series J 5.50% new issue.

Thoughts:

I don't know why they are not calling both preferred series as only 1/8 separate them. I like DDR, and there may be some value here, but they are kind of tight. Keep in mind these are below investment grade, this should be worth at least 100bps, so I would expect a 6.50% - 6.625% coupon (everything has been pricing tight).

Disclosure: I am long DDR.

Additional disclosure: long DDRPrH and DDRPrI

Stocks: DDR