ITT Educational shares reeling after deal falls through

Shares of Carmel-based ITT Educational Services Inc., a for-profit college operator, fell as much as 32 percent Monday morning after a deal to sell and lease back real estate fell through.

Shares slid to $9.72 in late-morning trading. The stock price has fallen about 70 percent since the beginning of the year, including Monday's loss.

College Portfolio Buyer LLC canceled the purchase of up to 24 properties on July 29, ITT said in a filing with the U.S. Securities and Exchange Commission after the markets closed Aug. 1. The sale would have brought ITT Educational as much as $119.1 million, the company said May 8 in a separate filing.

State attorneys general, the Consumer Financial Protection Bureau and the SEC are scrutinizing marketing, loan and accounting practices at ITT Educational. The company has said that the Education Department may require it to post a letter of credit to continue qualifying for federal student grants and loans.

The company also said on Aug. 1 that it was arranging financing for a letter of credit of as much as $98 million, an increase from $80 million, in case the Education Department demands it.

When questioned about College Portfolio Buyer, ITT spokeswoman Nicole Elam said that was a “generic” name used in the filing to identify an undisclosed potential buyer. ITT explored the sale as part of a review of its real estate holdings, she said.