$1B (+100m) 2 tranche Mando coming tonight from JPM/MER/GS. Terms:
tranche A $500 (+50) 04/01/16, 5.375%-6.125% +17.5-22.5%
tranche B $500 (+50) 07/01/16, 5.5%-6%, +17.5-22.5%, full pctns. UOOP = gcp, repay s/t debt.
Re-offer @49
Hedge funds will be exposed to 06/05/13 div so A will be 11 coupons and 12 dividends
B will be 12 coupons and 13 dividends but income fund interest in this credit rating and coupon will negate some of/all model output. Just to e thorough we’ll use 2 skew (17/15) & 50 bp credit.
A value 49.6, B value 49.6
Secondary market weakness with recent PCLN px price push back makes this less obvious but income funds were always going to drive this book. Possible IG index inclusion may help over time. We’d play on cheaps otherwise leave it to the long only