$220m (+33) sen unsec cb coming tonight from GS/CS. Terms : 5yr 1.25-1.75% up 32.5-37.5, full pctns. UOP = gcp/acq/hedge. Enhanced equity structure (stk + dvd). Stk +139% ytd & 55% in 2012. Fast growing $2B cloud based co which IPO in 03/11. We’d cap vol at 30%. Model is secondary tool, a sanity check. Theo = 98. We like story but CB is simply the wrong price. CPN is pre-rate move (5y out 54 bps since 05/03 low. We have seen some pricing push back of late and unless nonpx sensitive equity funds take deal this will be no exception. AVOID
Cloud based applications for talent management
PF Cash = $290m
PF Debt = 227m
LTM EBITDA -26m
LTM FCF 4m
Leverage nm
Mkt cap = 2120m
CSOD is a small cloud based s/w co offering integrated sol for recruiting, learning management, performance mgmt, and extended enterprise. They have partnered offerings with CRM and WDAY. Two primary comps acquired by SAP and Oracle last year, as both scramble to catch up in cloud based offerings. Co growing quickly, though EBITDA is –ve and FCF is modestly +ve. Short public history with IPO in 03/11. Pursuing additional growth thru int’l expansion and public sector. Existing debt is equipment financing.
Our assigned spread = L+500