The AIMC 2.75% converts were recently offered at 120 vs. 27.22 at Jefferies. This is a very small issue at $85m so 4m is the most I want to own. I like the profile of this balanced convert, which has a 2.3% current yield and 21% premium and five years until the put date. Using […]
EXXI trade analysis I like the EXXI position for the arb book. EXXI convertible preferred was offered at 303.24 vs. 28.32 on March 22. We currently own 6,700 pref shares (1.67m in bond terms) on a 64 stock only delta and short 152 June 29 strike calls for an effective delta of 74. Using assumptions […]
$250m (37.5m) sen cb coming tonight from JPM/NARC/GS/MS. Terms: 6yr, 2.5-3 up 27.5-32.5, nc-4, prov call @130% after, full pctns. UOP = repay debt/gcp. Concurrent $250m 8y str8 del. Co’s recovery very gradual. Exposed to fluctuation in US & Euro markets. Imports from china have increased, putting pressure on other markets. However, liquidity NOT an […]
On the mids, we think customers should consider buying the new SFI preferred deal. With no common dividend, the yearly cash flow is quite substantial and more than compensates for the premium. The positive cash flow also allows for heavy delta which handles the credit risk. We think there may be room for this security […]
$1b (+150m) sen unsec cb coming Tue night from MS/BOAML. Terms: 5yr, 0-0.25% up 47-52%, full pctns. UOP note hedge/acq/gcp. CB shud appeal to o/r’s with HF struggling with mode & optics. PF Cash = 2.73B, PF debt = $1.575B LTM FCF = $557m, LTM EBITDA = $261m 6x leverage. Olds came 0.75 up 25 […]
:**** DAIWA NEW ISSUE COLOR: ICON ********************* $350m (+50m) sen sub cb coming tonite from BARC.Terms:5y,1¼-1¾up 27½-32½%, full pctns. UOP=$75m stk buyback/hedge/acq/gcp.Co owns/manages 20 brands, most recently acquiring Umbro from Nike in 12/12 for $225m. Solid credit; low capex, high margin, strong c/flow & good liq (600m t/loan in 12/12, undrawn 100m revolver & 150m […]
$150m (22.5m) sen unsec cb coming tonight from MER. Terms: 6yr, 4-4.5% up 35-40%, H/C 4 yrs, no puts, full pctns. UOP = acq/gcp ¾ of FY12 rev came from google (search engine advertising) so co wants to diversify going forward (bought Tax Act in 2012). LTM EBITDA = 67m FCF 45m PF Cash = […]
Trade idea Arbitrage: ZINC Horsehead Holding (ZINC) is the largest producer of zinc products in the US and the largest recycler of EAF dust in North America. It is an integrated producer using recycled zinc feedstock and low-cost recycled electric arc furnace (EAF) dust to produce its zinc products. The company diversified into nickel recycling […]
$250m (+37.5m) sen unsec cb coming tonight from CS. Terms: 5yr, 5-5.5% up 10-15%, full pctns. UOP = acq assets/maintain REIT status. Portfolio = 20/80 commercial/residential (res 50:50 agency: non agency) Housing recovery has increased IVRs demand 4 riskier non agency. PF Debt = skewed by s/term repurchase agreements (cb only 1/term debt), cash = […]
**************** DAIWA NEW COLOR: RWT ************************** $150m (+22.5m) sen unsec cb coming tonight from JPM/BARC. Terms: 5y, 4⅞-5⅜% up 12½-17½%, full pctns. UOP=acq of res/mortgage loans/gcp. Co has track record from mid 1990’s, specialising in jumbo res/mortgages w/a smaller commercial u/writing biz. Wants to aggressively grow p/folio given real estate env. PFdebt=841m, cash=227m, LTM ebitda=213m, […]