VEREIT Announces Partial Preferred Redemption

As we all knew was coming, REIT VEREIT (VER) has announced the redemption of 8 million shares of the VER-F 6.70% perpetual preferred.

The company had previously redeemed 4 million shares so now in total they have redeemed 12 million shares of almost 43 million outstanding–so we still have 31 million shares trading.

The shares being called represent about 20.58% of all shares outstanding and will be redeemed at $25.028/share which represents liquidation plus accrued. A full dividend of about 14 cents will be paid to holders on 12/15/2019.

So for those that were wondering – the shares will be redeemed on a pro rata basis, so you will see 20.58% of your shares get segregated in your account and on the call date (12/21) they will disappear and cash will be received.

VER-F shares are now trading at $25.26 after falling as low as $25.07 yesterday. I know many folks took the opportunity to buy more shares (I bought 300 more) since the call risk had left the price. My purchase came as one of the readers pointed out a partial call instead of a full redemption–initially I had missed the partial call note.

Thanks to Dave for posting the company press release late today. The press release can be read here.

7 thoughts on “VEREIT Announces Partial Preferred Redemption”

  1. Too bad to lose this preferred but many opportunities to own under par so no one should be getting scalped.

    1. Is VER-PF a higher yielder than GOODN ?
      You will lose 20% of your VER-PF shares next month, but can buy back those shares.
      If VER takes 2 years to close out the issue, then you may come out ahead of GOODN which was 26.25 yesterday, roughly 5.6% yield to 1st call date.

    2. That was years ago and with the old management. Glenn Rufrano is a best in class REIT CEO and the right guy running things…it wouldn’t surprise me if he sold the company at some point.

    3. Yes. The hustler CEO of the defunct company was sued but saved by some activist and made it whole. Recently, I received some silly class action attorney, trying to entice me to look up dates for loss. Waste of time. Preferred shareholders who HELD on never lost money and actually made good money, while the commons did lose and I suppose those who sold when the preferreds when it got smashed following the commons probably did lose money too. The new company is a solid eREIT, similar to UBP and BFS (Saul Center). Razorbeakea and I from Doug’s web both consider these two and VEREIT as defacto unrated IG or SWAN. BTW, my VER-F preferred did get called some months ago, despite my earlier selling some fearful of the call. I will be interest, if the replacement is around 6% or even 5.9% or so.

      1. John, my dad talked me into that trade at $21 or so during the accounting scandel. It wasnt called VER-F then, but ARCPP or something like that. It was a nice little trade.

        1. Gridbird, you got a fantastic memory. Yes, preferreds, just one notch above common came back after fine. I bought at IPO also at relatively decent price. I do remember that the hustler claim that it will become a eREIT larger than O (Realty). It was too good to be true.

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