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Mega REIT Realty Income to List Preferred Stock

Giant net lease REIT Realty Income (O) has registered new preferred shares which have come about because of their acquisition of Spirit Realty.

Spirit had a 6% perpetual preferred issue outstanding which Realty Income has essentially replaced with a new Realty Income issue. Most of the data on the issue can be found here is the merger document.

The shares have been approved for listing on the NYSE. The ticker will be O-.

Thanks to Justin for noting this one.

15 thoughts on “Mega REIT Realty Income to List Preferred Stock”

  1. If “Realty Income, The Monthly Dividend Company” ever missed a dividend, they’d have to change their motto. Not happening, IMO. The preferred dividend will be paid or they’ll call it.

    6% is not fancy, but I like Maverick61’s logic: When one of my 6% agencies inevitably gets called, O- makes an acceptable, safe replacement.

    Closed at 24.96 after four days of trading. Where will it settle (at what current yield)? Because of the call threat, I doubt it trades above 25.

  2. Kid Twist

    Nice trade. Yeah, wish they all were as easy. You got in before me. I didn’t get in until early yesterday at 24.18. But still a nice quick return

  3. Thanks, Tim.

    The symbol will be “0-” (OPR O.PR, etc.). Like TY-, it’ll be the common stock symbol followed by a “-” or “PR” (or something else), depending on the broker.

    It’s “Series A” but the symbol is just O-.

    2WR posted the head’s up and the link in Reader Initiated Alerts.
    “At the closing of the merger, all of Spirit’s outstanding shares of Series A Cumulative Redeemable Preferred Stock were also exchanged for shares of Realty Income Series A Cumulative Redeemable Preferred Stock, which will trade under the symbol “O PR” on the New York Stock Exchange following the closing. “

      1. Now trading on Schwab but low volume (431 shares).

        Also from Schwab – next call date is 2/21/24 and callable anytime after. Is this correct?

        1. You’ll see that “next call date” updated daily as all it means is that it is now continuosly callable upon 30 day’s notice

        2. Proto it is immediately callable because terms and conditions are identical to the old SRC issue and it was callable starting in 2022.

    1. Martin,

      According to the document linked above the rate will remain the same at 6%. Not sure what’s the current credit rating for O but their previous preferreds were BBB- .
      “each share of Spirit 6.000% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Spirit Series A preferred stock”), issued and outstanding immediately prior to the Effective Time will be converted into one newly issued share of 6.000% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share, of Realty Income (“Realty Income Series A preferred stock”), with the terms thereof materially unchanged.”

      Anyone has an opinion if the new O-A is worth buying?

      1. 6% is the low end. O common stock historically pays a low dividend which typically remains steady or inches upward, it’s considered a solid investment. So O-A might be a sock drawer buy. As a trader I don’t expect much movement unless interest rates are volatile. Of course it depends on the price, wild things can happen when it first starts trading

      2. I am going to do a direct comparison to PSA preferred to determine if the O-PR is worth buying based on rating and yield. No hurry though. 6.x% is not exactly exciting considering it is not QDI. Quite a few choices can easily match up to that and I will not add a possible call into my calculations as ~5% is probably what O can borrow at right now which does not seem to mean there is a HUGE rush to call it.

      3. O is a stronger company than Spirit so the preferred could have a rating upgrade over what it was. I am a long time holder of O common

        While 6% is on the lower end of yields I bought some shares today because to me O is a SWAN stock. And it would not surprise me, especially as rates drop, that O calls this stock because they have the ability to borrow at a lower rate. So that would be a nice bonus getting it at roughly a 80 cent discount to par

        I also had some money from a Federal Farm Credit Bank Bond that was called and redeemed early today at close to the same yield – so thats why I bought some O- today

        1. Mav:

          Thanks for your views on this one…sold nearly all of my Op (ticker at Schwab) near $25 this morning. Not much left to squeeze out at that price. You could have bought some at $23.85 last Friday (I did).

          The quick trading gains almost don’t seem fair. Can it be this easy sometimes?

          Thank you, Realty Income!

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