American Realty bonds take another leg lower; Omnicare higher; Owens-Illinois sets tender

By Rebecca Melvin

New York, Nov. 3 – American Realty Capital Properties Inc.’s convertibles were hit again and actively traded on Monday after word that the New York-based real estate investment company’s deal to sell Cole Capital to RCS capital Corp. fell through.

Last week, American Realty’s convertibles and other securities were torpedoed by the company’s announcement of accounting errors, which made financial statements appear better than they actually were.

According to news reports, citing unnamed sources, the Federal Bureau of Investigation has opened a criminal investigation into the matter, which the Securities and Exchange Commission was also reported to be investigating.

Many convertibles market players were focused Monday on the American Realty 3% and 3.75% convertibles and on little else, a New York-based trader said.

But Omnicare, Inc.’s new and older 3.25% convertibles traded higher after the Cincinnati-based pharmaceutical services provider swapped out $241.5 million of the older 3.25% issue for new debentures that were essentially the same except for updated put and call options.

Owens-Illinois Inc.’s 3% exchangeables traded over par after news that a cash tender offer has begun for the Owens-Brockway Glass Container Inc. $628.7 million outstanding issue of senior notes due 2015.

Laboratory Corp. of America Holdings’ 0% convertibles due 2021 were seen lower at 135.5 from 146.8, according to a market source, after news that the health care diagnostics company has agreed to buy Covance Inc. in a deal worth about $6 billion. LabCorp shares fell 7%.

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