Midday Commentary: New Yandex, Trulia edge higher outright in early action; E-House shares jump

By Rebecca Melvin

New York, Dec. 12 - Yandex NV's newly priced 1.125% convertibles edged up from par on their release to the secondary market early Thursday after the Netherlands-based internet search engine company priced $600 million of the five-year bonds toward the cheap end of coupon talk and toward the rich end of premium talk.

The Yandex convertibles were quoted at 101.875 bid, 102.25 offered in the early going with the underlying shares up 2%. By late morning, the shares were up by 3.3% to $38.67.

Before pricing, the Yandex bonds had looked cheap with fair value at 102 at the midpoint of price talk, using a credit spread of 350 basis points over Libor and a 35% vol., according to a Connecticut-based trader.

Also marking a debut in the convertibles secondary market early Thursday was Trulia Inc.'s upsized $200 million of 2.75% seven-year convertibles, which were seen at 101.375 bid, 101.875 offered. The underlying shares of the San Francisco-based real estate website wavered in early trading to just under and over their flat line.

A third new deal in the market was E-House (China) Holdings Ltd.'s downsized $135 million of 2.75% five-year convertibles, which were not seen in trade but were heard to have priced at a discount to par of 97.5.

E-House's American Depositary Shares surged in early action and were higher by 92 cents, or 7%, at $13.84 at late morning.

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