All about converts

$125m (+18.75m) sen unsec cb coming tomorrow night from JPM/CS. Terms: 7 yr, 5.25-5.75 up 27.5-32.5, full pctns. Concurrent 25, stock & $350m 6 yr sen sec str8. UOP = repay asset backed debt/gcp. 7.625% 20 OAS about 920, 5yr CDS indicated 1030. We’ll assume B, L+1000. ADV = 1.2m Leaps illiguid, 2 yr 90d 50/10% = 58/44. Brw ~2% (2ndary will help so will use blended 1.5%). Another EQTY+DIV CB so again model really is a sanity check. Brw+credit = -ve gamma/convexity so we will cap vol at 35%. Theo = 103.9/106.1/108.3. Equity HDS + obvious equity switch + potential stock bounce off placement (stock already down 14%) + tight allocations means anything off rich end will be a STEEL. However much you vary the inputs (to a pt) this deal is CHEAP.