Midday Commentary: China's YY added to pipeline; trader hesitant about Chinese deals

By Stephanie N. Rotondo

Phoenix, Nov. 14 - More deals were being added to the convertible bond calendar on Thursday.

Early in the day, Chinese social media company YY Inc. said it would sell up to $250 million of convertible senior notes due 2018.

The notes will be convertible into American Depositary Shares, each of which is equal to 20 common shares.

The YY deal came on the back of an announcement from SINA Corp. late Wednesday. SINA, another China-based company, said it was planning to issue up to $600 million of convertible senior notes due 2018.

Both are being done via Rule 144A offerings.

A trader noted that SINA was a well-known company, though he was not overly optimistic about either deals given that NQ Mobile Inc.'s 4% convertible notes due 2018 "worked out so well," he said with sarcasm.

NQ Mobile sold $150 million of the notes on Oct. 9. A couple weeks later, on Oct. 24, Muddy Waters LLC, a Hong Kong-based research firm, alleged that the company was engaged in "massive fraud," an accusation that the company has denied. But the criticism sent the new issue down to around half of par value.

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