Interactive Intelligence looks cheap on the mids; Emerald Oil gains; Whiting Petroleum up

By Rebecca Melvin

New York, May 19 – Interactive Intelligence Group Inc.’s $150 million offering of five-year convertibles was looking about 1.5 points cheap at the midpoint of price talk, assuming a credit spread of 550 basis points over Libor and a 35% vol., a Connecticut-based trader said Tuesday.

A second Connecticut-based market source concurred with those assumptions, saying his valuation was similar.

The Interactive Group deal, which was expected to price after the market close on Tuesday, was talked at a 1.25% to 1.75% coupon and a 27.5% to 32.5% initial conversion premium.

Elsewhere, Emerald Oil Inc. was active and moved up on an outright basis by about 4 points after the Denver-based independent oil exploration and production company said that it plans to price $150 million of common stock in a secondary offering.

Other energy names were also in focus as the overall energy sector was under pressure amid lower oil and natural gas prices, a New York-based trader said.

Whiting Petroleum Corp.’s convertibles were lower outright but edged up on a dollar-neutral, or swap, basis amid lower shares of the Denver-based oil and gas E&P company.

Also Take-Two Interactive Software Inc.’s two convertible bond issues popped in active trade along with higher shares after the New York-based video game publishing company beat profit estimates but missed revenue guidance and also guided higher for the current quarter.

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