Industrial REIT Monmouth Sells a Refinancing Preferred
By: Tim McPartland,
Monmouth Real Estate Investment Corporation (NYSE:MNR) has sold a 6.125% cumulative, redeemable preferred stock issue with the intention of redeeming their outstanding Series A preferred. The issue to be redeemed carries a coupon of 7.625% meaning MNR will reduce their annual costs by near $2 million annually. While the 6.125% coupon seems a bit stingy it is what is available in this yield starved market.
The new issue has all the typical preferred stock terms. The issue is cumulative in respect to dividends, redeemable after approximately 5 years and since MNR is a REIT the dividend payments are NOT qualified for preferential tax treatment.
Monmouth owns 100 buildings throughout the United States which they lease to quality companies such as Coca-Cola, General Electric, ConAgra and Snap-on-Tools. Total annual rental receipts are in the $80 million dollar area, making MNR a rather small REIT, but they bring a significant portion of revenue to the net income line.
The new issue began trading on the OTC Grey Market on Wednesday under the ticker MONMP and is trading in the $25/share area. For those not familiar with purchasing new issues on the OTC Grey Market you can find our short “primer” here.
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