Equity LifeStyle Properties Inc. announced on Tuesday (July 24) that it is exploring alternative ways to reduce the company’s cost of capital, including but not limited to potentially redeeming for cash some or all of its 8.034% Series A Cumulative Redeemable Perpetual Preferred Stock or replacing the Series A Preferred Stock.

The Chicago-based company, which owns or has an interest in 382 RV and manufactured housing properties in 32 states and British Columbia consisting of 141,077 sites, says that under current market conditions, it could issue and sell a new series of preferred stock bearing a lower dividend yield than the yield on the Series A Preferred Stock, ELS stated in a news release.

There are two principal techniques by which the company could seek to replace the Series A Preferred Stock with a lower-yielding preferred security:

• First, the company could exercise its right to redeem the Series A Preferred Stock at par and fund the redemption with proceeds from a new issuance of lower-yielding preferred securities and/or other sources of financing, including but not limited to its balance sheet.

• The company could conduct an exchange offer in which the existing holders of the Series A Preferred Stock would exchange some or all of their shares for newly issued preferred securities bearing a dividend yield in the range of approximately 6% to 7%t with 5-year no-call protection. Any such exchange offer would be subject to customary conditions including a minimum tender requirement. In addition, the company may consider other transaction structures as well.

In order to assess the viability of these alternatives, the company expects to engage in discussions with potential capital sources and with certain holders of the Series A Preferred Stock.

There can be no assurance that the company will pursue any of the strategies described above, or as to the terms or timing of any transaction the Company might elect to pursue, particularly in light of the current volatility in the capital markets.