Spirit Realty active at higher levels on the back of S&P upgrade; Lam Research slips

By Rebecca Melvin

New York, April 25 – Spirit Realty Capital Inc.’s two convertibles remained a centerpiece of trade on Monday as market players continued to react to the Standard & Poor’s corporate credit rating upgrade of the Scottsdale, Ariz.-based real estate investment trust on Friday, market sources said.

S&P upgraded its corporate credit rating on Spirit Realty to BBB- from BB+, saying the upgrade primarily reflected the REIT’s recently upsized equity issuance, which resulted in net proceeds of $369 million.

The new equity modestly lowered leverage and is also expected to accelerate the pace of unencumbering the company’s asset base.

Spirit Realty’s 2.875% convertibles due 2019 were trading actively at 103, which was steady compared to Friday’s level, which jumped 2.5 points on the news.

Spirit Realty’s 3.75% convertibles due 2020 were at 105, which was up 3.5 points from Thursday.

Spirit Realty shares ended fractionally higher by 0.6% to $11.24.

Overall the convertibles market was pretty quiet, but the Spirit Realty A and B tranches were trading “on the back of the SPX upgrade to IG on Friday,” a New York-based trader said.

Lam Research Corp.’s 0.5% convertibles, which mature next month, traded lower to about 131, which was off 1.6 points on the day, according to Trace data. Shares of the Fremont, Calif.-based semiconductor manufacturing equipment maker were off 43 cents, or 0.5%, to $80.22.

Lam Research’s 2.625% convertibles due 2041 traded at 237.4, which was off a point.

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