10/16/12 WAC
$265m (+25m) sen sub cb coming weds from CS/MS/MER/BARC. Terms: 7 yr, 4.5-5% up 35%-40%, full pctns. Concurrent 4.5m (+675k) stk offer UOP = acq/repay second lien debt. Stk +132% since 05/12 & @highest pt > 2007 housing crash, issuing down cap/structure to refi makes obv sense 4 co. Current debt secured ($2.2B mortgage backed & $728m t/loan). CB will take out $265m 2nd lien loan (rated B, L+1100, entered into 07/11). Co wants to refi L+625 1st lien loan as well 7yr this far down cap/structure = CCC & L+1000. ADV = 220k, 50% go to H/F ~8d vol needs 2 be shorted (80d), -ve gamma obvious reality, 90d 50/90 ile = 39/30. Equity + div so model 2ndry. We’ll use 32%. Theo 102.3. Stk +130% = can’t rely on placement bounce esp w/shorting pressure. Too Wacky. Avoid.