Morning Commentary: planned NRG Yield looks cheap; Ingenico bringing €500 million deal; Citrix adds

By Rebecca Melvin

New York, June 23 – Convertibles players were sizing up a couple of planned new issues that were expected to price after the market close on Tuesday. NRG Yield Inc.’s proposed $250 million sale of five-year senior notes was looking cheap and CorEnergy Infrastructure Trust Inc.’s deal had a nice, chunky coupon but the $75 million size was deemed too small to be of interest to many.

Using a credit spread of 300 basis points over Libor and 25% vol., the NRG convertibles looked worth 102.80 at the midpoint of talk, a Connecticut-based trader said.

The NRG deal was talked at a 3% to 3.5% coupon and 22.5% to 27.5% premium.

CorEnergy was talked at a 5.75% to 6.25% coupon and 12.5% to 17.5% premium.

Internationally, France’s Ingenico Group, a known convert issuer, launched an offering of about €500 million of seven-year convertible bonds that were talked to yield 0% to 0.5%, with an initial conversion premium of 40% to 50%.

The Regulation S deal was being sold via joint bookrunners Goldman Sachs International, Societe Generale Corporate & Investment Banking, HSBC and Natixis.

Back among established issues, Citrix Systems Inc.’s 0.5% convertibles due 2019 were up about 2 points on an outright basis in very active trade on Tuesday morning. They were last at 107.5, according to Trace data, up from 105.5, with the underlying shares of the Fort Lauderdale, Fla.-based cloud computing company also up nearly 2%.

Last week Citrix fell sharply after news that Standard & Poor’s was removing its unsolicited rating on the company.

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