$150m (22.5m) sen unsec cb coming tonight from GS/MER. Terms: 10y 4.75-5.25% up 10-15%, s/c 7y @1120% (cpn/make whole), full pctns. UOP = acq. Quasi reverse enquiry w/xover but we’ll still run exercise. Commercial RE inv REIT w/small subsidiary specializing in single family rental market. $143m undrawn sec/bank loan amended in Sept @ L+375, expires 8/13 (converts into 1y loan). PF Cash = 548m (232m raised in 01/13 stock replacement), LTM ebitda = 79m, fcf = 71m, lev = 3.3x. We’d assume L+500. ADV = 450k, no leaps, we’d cap 10 yr vol at 20%. Theo = 101.2 w/oput stock down. Stk down to $21 = 100. Hearing STWD type investor interest who know sector will. Little pressure on stock given small h/f allocations, small deal – skewed by demand and not valuation. We’ll leave it to the experts.
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