:**** DAIWA NEW ISSUE COLOR: ICON *********************
$350m (+50m) sen sub cb coming tonite from BARC.Terms:5y,1¼-1¾up 27½-32½%, full pctns. UOP=$75m stk buyback/hedge/acq/gcp.Co owns/manages 20 brands, most recently acquiring Umbro from Nike in 12/12 for $225m. Solid credit; low capex, high margin, strong c/flow & good liq (600m t/loan in 12/12, undrawn 100m revolver & 150m sec rev due 11/13). See CREDIT COLOR. Existing pari 2.5% CB came 05/11 2.5% up 32.5% w/stk 20cents away ($23.21). These are ~108.5 w/42% premo & x/par +71% (O/R’s clearly like this name). We’d assume L+400 & 28vol (2yr 90d 10/50%ile still 24/41 despite recent dampened vol.ADV=684k).Theo=100.2/102.2/104.2.We’d prefer 2 WEAR this on MIDS but again at mercy of l/only demand.Balanced CB’s on good credits harder 2 find in 2cndry >BUY<(Cofiling/bbg)
Brand management co w/20 brands including Candie’s, Mudd, Joe Boxer, London Fog, OP, Voyal Velvet, & Sharper Image
PF Cash $495m
PF Debt $1282m
LTM EBITDA $224m
LTM FCF $201m
Leverage 5.7x
Mkt cap = $1.52B
Icon owns & manages brands. Biz has limited assets & not cap intensive. Licensing model benefits from predictable royalty inc, high margins, & strong FCF. Co acq w/most recent Umbro from Nike for $225m cash. $600m sec term loan issued 12/12 + $100m var funding revolver (undrawn currently) avail. Add’l liquidity from $150m sec rev due 11/13. Both converts senior sub & rank behind other debt. Buying back stock.
Our assigned spread L+400