Topic Archives: Convert New Issue Analysis

Convertible bonds new issues usually drive-by deals whereas most new high yield and loan issues go through a 1-2 week road show. This is becuase a large part of a convertible bond’s valuation is equity and requires less credit/indenture analysis. Most convertible bonds do not have financial covenants. Once a deal is announced, investors have a short amount of time (usually 1 day or less) to perform a quick and dirty analysis on the deal. Daiwa does a good job of this type of analysis and I have documented most of it here. Exceptions are clearly stated.

Rait Financial (RAS) new issue 03/14/11

$100m (+14m) sen unsec cb coming tonight from ML. Terms: 20 yr, 5.75-6.25% up 17.5-22.5%, call 5y, puts 5,10,15y. Full pctns. UOP = repay debt/gcp. REIT that does not conjur pleasent memories. Hit hard in 2008, it has attempted to reduce debt (incl 6.875% w/$136m outstanding. Most recent trans 1/11 @88). Credit color will touch […]

Illumina (ILMN) new issue 03/14/11

$800m (+120m) sen unsec cb coming tonight from MS/GS. Terms: 5yr 0.25% up 30%, full pctns. re-offer 98.5-100, happy meal (60d). UOP=stk buyback & fund 0.625% conversion. Well, where does one even start? We all want the same thing, issuance but not like this. Going to keep this brief; MCP, ORI, WBMD new, CX all […]

Cemex (CX) new issue 03/09/11

$1.2B (+$180m) sub cb coming tonight from Citi/JPM. Terms: 5yr: 3-3.5% up 27.5-32.5%, 7 yr 3.5-4% up 27.5-32.5, pctns. UOP = capped call/repay debt. Yet to recover from downturn/slow upturn w/sale & ebitda -35 & 50% btw 2007 and 2010. At this level of cap/structure you must really back US housing mkt recovery. 5yr sen […]

ReneSola (SOL) new issue 03/09/11

$175m (+25m) 144a senior cb pricing tonight from BARC/CS. Terms: 7yr, 3.625-4.125% up 20-25%, put year 5, prot. concurrent capped call transaction. Based in China, Renesola is a global manufacturer of solar wafers & solar power products. $740m mkt cap. PF Cash = $461m PF debt = $697m FCF + for first time in 2010 […]

Tivo (TIVO) new issue 03/08/11

$120 (+18m) sen unsec cb coming tonight from UBS. Terms: 5yr, 4-4.5% up 22.5-27.5% full pctns. UOP=fund i/p litigation & gcp. T+1 cos deal w/get pulled if Echostar wins case b4 settlement date. This is obv med/term driver. Had edge w/jury trial/appeal. Stock spiked to $18 on appeal win but tanked > rare en banc […]

Altra Holdings (AIMC) new issue 03/03/11

$75m (+10m) 144a senior cb pricing tonight from JPM/JEF. Terms: 20 yr, 2.75-3.25% up 30-35%, nc4-sc3@130% w/cpn make whole, puts 7/10/15, protections. UOP = acq financing & gcp. Altra Holdings is a leading manufacturer of mechnical power transmission products w/leading positions in niche markets. Cyclical biz. Sales & margins seen some recovery. Modest FCF+ & […]

Old Republic (ORI) new issue 03/03/11

$250m (+37.5m) sen unsec cb coming tonight from MS/UBS. Terms: 7yr 3.5-4% up 30-35%, pctns (div > 0.175 qtr), concurrent $250m 10 yr str8 (L+250). UOP=repay debt/gcp. Existing 8% ’12 mostly held by o/r (6.8% up 13%@117 w/div pctn > 17c using L+100 = 23iv). Use L+200 for 7yr. No leaps, ADV=1.5m, 100w=29, 100d=21 so […]

Health Care REIT (HCN) new issue 03/01/11

$625m (93.75m) perp prf coming tonight from UBS/MER/DB/JPM/WFC. Terms: 6.5-7% up 15-20%, s-c@130 yr8, pctns (div> new 0.715). COncurrent stk of 25m (3.75m). UOP=genesis assets. 3 existing issues most notably 1.3 yr 4.75% ’27=17iv (25bp) 4 yr 3%=19iv (90bps) or L+150ics. 5 yr CDS = 90bps. Tough to apply 2.5x CDS formlua in cycle. We’ll […]

Jaguar Mining (JAG) 02/07/11

$90m (+13.5m) 144a senior unsec cb pricing tonight from BOA. Terms: 5yr bullet, 5.5-6% up 32.5-37.5, protections. Jaguar is a $500m mkt cap, emerging gold mining company w/3 producing mines in Brazil. UOP=to develop 4th time (Gurupi). PF Cash = $136m, PF Debt = $284m LTM EBITDA = $22m LTM FCF = neg $110m They […]

MF Global (MF) new issue 02/07/11

$250m (+37.5m) sen unsec cb coming tonight from GS, Citi, DB. Terms: 5yr bullet, 1.75-2.25% up 25-30%. UOP=pay down revolver, hedge V shape recovery reminder again: 9% in 2008 to 2% cpn in 2011. Co plans to double rev < 5yrs by becoming inv bank. Liq good = $690 of $1.2 revolver ext to 06/14 […]