3/13/12 Salix Pharmaceuticals
$500m ($75m) snr unsecured CB coming o/night from Bofa. Terms, 7 yr bullet, 1.5-1.75 up 35%, full pctns, happy meal. UOP include buying back 5.5%/2028 CBs and $50m of stock. Existing 2.75% of 2015 is a $345m deal, back out L+213 (35 vol). Hear 45/350 being suggested for modeling, those that follow our new issue color know we’ll struggle north of 35. We’ll go with 33/425, which means Theo = 102.43. Profile OK (mids), 1.625 up 35, theo delta 69%, 0.53% gamma, floor 76.18. Room for credit tightening. Co is a specialist in gastrointestinal disorders, well liked, even after stk run, outrights will be mindful of both. We can stomach these – prefer mids or better. We look forward to putting these on the runs – BUY