There already was a tender offer PS Business Parks, Inc. Commences Tender Offers to Purchase for Cash Any and All of its Outstanding Preferred Securities Described Below - PS Business Parks, Inc. (PSB) in the $15 range (depending on the specific issue), so you probably need to think more in that range than in the $20 range. If they call them, they do need to be called at $25.
As I said in November in this post PSB Preferreds getting screwed by BX - #3 by aj485 what you need to worry about is the preferreds being Waldenized. The entity legally responsible for the dividend payments is Sequoia, not Blackstone. That said, if BX is to get any dividends from Sequoia, the preferred dividends would be in line ahead of those payments. If you presume that BX wants to extract value from Sequoia, that would make you feel that it’s less likely that the preferreds will be Waldenized.
However, the elephant in the room is that BX already extracted a big chunk of value from Sequoia by obligating Sequoia on a mortgage secured by the PSB property. The mortgage, being senior secured debt, takes precedence over the preferreds. Considering that many commercial mortgages are variable rate, that means in the current environment, the payment obligation on that mortgage is going up, so there is less money available to service the preferred debt.
Since Sequoia is a private entity, you’re going to have to do a lot of digging to find specifics of the cash flow from the property to see if it’s going to be able to support both the mortgage obligation and the preferred dividends.
AJ