How might the sale influence the yield and price of City Office's existing bonds or preferred securities?

The Phoenix‑portfolio sale injects $266 million of cash and eliminates six properties that together represented roughly 12‑15 % of the REIT’s asset base. From a credit‑fundamental standpoint the proceeds will be used to retire a portion of senior debt and to fund near‑term acquisition‑plus‑development opportunities that carry higher yields than the legacy Phoenix assets. This deleveraging improves the company’s debt‑to‑EBITDA and interest‑coverage ratios, which should tighten the spread on City Office’s existing senior notes and preferred shares. In practice we can expect a modest price rally in the bonds (and preferreds) and a compression of yields—typically 5‑10 bps for the senior 6.5 % notes and 7‑12 bps for the 6.75 % series A preferreds—relative to the last week’s levels, assuming no other market shock.

Technically, the bonds have been trading near the lower end of their 5‑year high‑yield index range (≈102 % of par) with the 6‑month moving average crossing upward. The asset‑sale news provides a catalyst that could push them above the 103 % threshold and re‑establish a bullish 20‑day SMA. Preferreds, which have been slightly discount‑trading (≈98 % of par), may see a quicker bounce as investors re‑price the lower credit risk and higher cash‑flow coverage. Actionable take‑away: for fixed‑income desks, a small‑to‑moderate position in the senior notes or preferreds could be added on a pull‑back, targeting a 2‑3 % total return over the next 6‑12 months, while keeping watch on any post‑sale earnings guidance that could alter the cash‑flow outlook.