Morning Commentary: American Realty, Twitter tranches weaken; Euronet, American Energy on tap

By Rebecca Melvin

New York, Oct. 30 – American Realty Capital Properties Inc.’s convertibles extended losses in active trade early Thursday as shares of the New York-based real estate investment company continued to tumble following news of accounting errors at the company.

The real estate company said certain amounts related to adjusted funds from operations were overstated and not corrected when discovered. The Securities and Exchange Commission has begun an investigation into the matter, according to reports.

American Realty’s 3% convertibles due 2018 were trading around 93.25 after dropping to the lower 90s before recouping to about 93 or 94 on Wednesday. On Tuesday, the bonds were in the upper 90s, according to Trace data.

American Realty’s 3.75% convertibles due 2020 were last at 93.

American Realty shares were down another 6% at $9.36, extending a 19% drop on Wednesday.

Twitter Inc.’s convertibles lagged further in active trade two days after the San Francisco-based social media company reported lower user growth for its latest quarter, which disappointed investors.

Twitter’s 0.25% convertibles due 2019, or the A tranche, were last seen at 90.853 versus a stock price of about $41.15, according to Trace data. That was down from 92.50 versus an underlying share price of $42.50 on Tuesday.

Twitter’s 1% convertibles due 2021, or the B tranche, were seen at about the same level, compared to 92.25 on Tuesday.

Shares were down about 2.3% following a 10% drop on Tuesday.

Ahead of the market open, Euronet Worldwide Inc. launched a $350 million offering of 30-year convertible senior notes that was planned to price after the market close to yield 1.375% to 1.875% with an initial conversion premium of 30% to 35%.

American Energy Permian Holdings LLC, an affiliate of American Energy – Permian Basin LLC and American Energy Partners LP, said late Wednesday it plans to price $800 million of eight-year exchangeable junior subordinated notes in a private offering.

No further details could yet be obtained. Joint bookrunners are Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Jefferies & Co. and Morgan Stanley & Co. LLC.

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