Planned GNC deal looks cheap; NRG Yield off on earnings; Ctrip up outright post earnings

By Rebecca Melvin

New York, Aug. 4 – GNC Holdings Inc. launched a $250 million offering of five-year convertible senior notes on Tuesday that it planned to price after the market close.

The GNC deal looked cheap at the midpoint of price talk using a credit spread of 300 basis points over Libor and 34% vol., a New York-based trader said. At those inputs the deal for the Pittsburgh-based wellness retailer valued at about 103, or 3% cheap, he said.

“It’s not bad optically, and the credit is really good,” the trader said.

A second market source said that the credit was not necessarily great, but the fact that it’s a larger market capitalization company was positive.

Elsewhere, NRG Yield Inc.’s convertibles were down along with the underlying common stock of the Princeton, N.J.-based electricity generator after it posted second-quarter earnings and revenue that missed estimates.

Moving in the opposite direction was Ctrip.com International Ltd.’s convertibles, including the newer C and D bonds, which were higher after the Shanghai-based online travel company posted better-than-expected earnings. Ctrip shares were higher by about 10%.

Other names were moving in line, or flat, compared to their underlying shares, including SunEdison Inc.’s convertibles and those of Twitter Inc.

Etsy Inc., which is not a convertibles issuer, plunged in after-hours action despite posting earnings and revenue that were better than expected. The e-commerce company warned however that foreign exchange rates could negatively affect third-quarter sales growth.

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