$250m (37.5m) sen cb coming tonight from JPM/NARC/GS/MS. Terms: 6yr, 2.5-3 up 27.5-32.5, nc-4, prov call @130% after, full pctns. UOP = repay debt/gcp. Concurrent $250m 8y str8 del. Co’s recovery very gradual. Exposed to fluctuation in US & Euro markets. Imports from china have increased, putting pressure on other markets. However, liquidity NOT an issue at moment.
PF Debt $4.469B
PF Cash $1.055B
P Lev 4.3x
FCF $412m
We’re aware of where existing straights trade but with 6yr CDS 680/720, we’ll use L+700. 90d 50/10 ile, vol = 49.7/40.2. 2 yr 90d real = 36.5. We’ll use 35. Stk brw -1.5%. Theo = 97.75. Stock has been beaten up and slow to bounce. X4 traded rich for a long time, so no reason this won’t as well. Need to see o/r demand in order to make this work bc even on cheaps, this certainly not a STEEL.
Integrated steel producer
X has seen gradual improvement last few years. Have benefited from improvement in auto industrial and strong demand for oil country tubular goods. But steel market conditions remain depressed w/global econ cond remaining challenging & cont oversupply. Slowing growth in China has led to mfgs to ship more to the US, adding to the oversupply issues. Industry cond remain fragile. Liquidity is good w/full $875m secured rev available, $625m A?R sec facility avail, & $300m of European credit fac available.
Our assigned spread L+700