Planned LinkedIn premium cut during marketing; American Realty better; energy shares up

By Rebecca Melvin

New York, Nov. 5 – Convertibles players were sizing up LinkedIn Corp.’s planned $1.15 billion offering of five-year convertible senior notes on Wednesday. The deal was seen slightly cheap, and then a little cheaper still after the range on the talked initial conversion premium was revised lower to 35% to 40% from 40% to 45%, sources said.

The LinkedIn deal was seen worth about 103 at the new terms at the midpoint of talk, using a credit spread of 175 basis points over Libor and 35% vol., according to a Connecticut-based trader.

At original terms, the deal was seen worth about 101, he said.

Recent convertible issues of related companies were lower in the secondary market on the back of the LinkedIn deal, including Yahoo! Inc., Red Hat Inc., Citrix Systems Inc. and Twitter Inc., a New York-based trader said.

American Realty Capital Properties Inc.’s convertibles regained ground for a second straight day following a slide last week that continued on Monday after the New York-based real estate company announced accounting errors. The company is also under investigation by the Securities & Exchange Commission.

Elsewhere, energy names were stubbornly quiet despite a surge in the shares of many coal producers and E&P companies.

The U.S. midterm elections result, which will put Republicans at the helm of both the House of Representatives and the Senate, bode well for energy, particularly coal names, a New York-based trader said.

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