Standard Pacific (SPF)
$250m (+22.5m) REG unsec senior cb pricing tonight from JPM/CS/Citi/Bofa. Terms 1.125%-1.625% up 37.5-42.5$ p/c yr 5, prot. UOP = GSP. Concurrent 12.5m shares. Homebuilder operating in CA, FL, AZ, NC, SC, TX and CO. 5 yr CDS 345/365. SPF has more checkered past than RYL, DHI, LEN (stk 0.67 at the lows), we’ll add sector basis and use L+500. 90 day 50/10 ile = 56.6/38. If stock heads anywhere close to lows, we doubt you’ll be buying stock back, we’ll dscnt to 35 vol. Stk brw pre deal 50 bps, now out to 150bps, but should settle back post deal (every 50 bps = 1 pt) Using 50 bps, 100.25, Housing is hot, deal is small, market needs primary but be careful getting too close to the sun, buy on cheaps.