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Morning Commentary: Synergy prices upsized deal; American Realty falls, cites accounting errors
By Rebecca Melvin
New York, Oct. 29 – Synergy Pharmaceuticals Inc. priced an upsized $175 million of 7.5% convertibles early Wednesday, but the bonds were not seen in secondary market action afterwards, sources said.
“This was a wall crossed deal and probably put away with a small group of accounts,” a Connecticut-based trader said.
Synergy shares were about 3% higher in early trading.
BofA Merrill Lynch was the bookrunner of the Synergy deal, which was upsized from up to $150 million and priced at the fixed price points that were talked, including an initial conversion price of $3.11.
Also in the primary, Fiat Chrysler Automobiles NV said it plans to price $2.5 billion of mandatory convertibles in a registered offering by the end of the year.
The mandatory convertibles will be offered together with common stock, and the offerings are being priced in conjunction with the company’s spinoff of Ferrari SpA, which the company announced Wednesday.
Elsewhere, American Realty Capital Properties Inc.’s convertibles were dropping in active trade as shares of the New York-based real estate investment company tumbled following the company’s announcement of accounting errors.
The company said certain amounts related to non-controlling interests were incorrectly included in adjusted funds from operations, and chief financial officer Brian Block and chief accounting officer Lisa McAlister have resigned because the accounting mistakes were not corrected. Shares were down 34%.
American Realty’s 3% convertibles due 2018 fell from the upper 90s to the lower 90s, according to Trace data.
American Realty’s 3.75% convertibles due 2020 were down nearly 10 points to 91.4, Trace reported.
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