Morning Commentary: American Realty slips further in active trade; ServiceNow ‘up a little’ on week

By Rebecca Melvin

New York, Dec. 19 – American Realty Capital Properties Inc.’s convertibles, which have been a feature of trade for much of the past week, were weaker in active trade on Friday after an ex-executive filed a lawsuit against the company on Thursday related to an ongoing accounting scandal swirling around the New York-based real estate investment trust.

Lisa P. McAlister, former chief accounting officer, alleged that she was fired from the company in October because of her statements that changes in accounting practices were an attempt to hide disappointing financial performance.

The suit follows news on Monday that three top executives at the firm have resigned, including managing partner and founder Nicholas S. Schorsch, in connection with “intentional” accounting errors that came to light in October.

American Realty’s 3% convertibles due 2018 traded down to 86 on Friday, which was down from 87 to 88 on Thursday. On Monday, the bonds fell to as low as 88.25, which was off more than 4 points, but they had recovered to about 90 against a share price of $8.23, which was down 8.5%.

American Realty’s 3.75% convertibles due 2020 traded between 85 and 85.5 on Friday, which was down from 86 to 87 on Thursday.

Shares of the REIT were off 3 cents to $8.04 on Friday, after falling 4% on Thursday.

At the end of October, the bonds dropped to the low 90s from the high 90s after news of the accounting errors and resignations of its chief financial officer and McAlister.

Elsewhere, ServiceNow Inc.’s 0% convertibles due 2018 were in trade and little changed, although still a little higher on the week, a New York-based convertibles sellsider said.

The ServiceNow bonds were seen at 113 bid, 114 offered against shares of the San Diego-based cloud IT services company that were at $69.00, up 92 cents, or 1.3%, on the day.

Earlier this week, RBC Capital Markets upgraded ServiceNow to a top pick from “outperform” and raised its share price target to $80.00 from $70.00.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.