$100m (15m) sen unsec cb coming Thurs from MS/GS
Terms:
5yr 1.75-2.25% up 32.5-37.5%, full pctns, UOP= GCP/working capital/strategy projects. CB is only debt but LTM EBITDA = -$54m and LTM FCF = -82m
Co expects 20% revenue growth in 2013 & profitability within 2 years but has history of falling short of expectations. We know others will use tighter but we’ll be conservative and use L+600
Stock up 70% ytd.
2yr 90d 50/10ile = 48.5/41.2, 90d real vol = 58, but 1yr ADV = 929k, so we’ll discount to 35. Using 75bps borrow, theo = 100.625. Hearing deal already covered, but small size would have ensured easy coverage, esp with over 3b of paper set to roll off in next 3 weeks. If there is anything available we’d push for MIDS.
Optical networking equipment
PF Cash = $262m
PF Debt = $100m
LTM EBTIDA = -$54m
LTM FCF = -$82m
Mkt cap = $1148m
INFN has been shipping products for 9 years, but rarely prof. Comp against some large cos incl CSCO, Fujitsu, NEC. Having success w/DTN-X line, began shipping mid-2012. Have acq 9 new cust since then. 1Q13 exceeded expect & co now indicating close to 20% rev. growth for 2013. Newly avail 100G after difficult 2012. Focused on cost reduction initiatives which should lift margins. Asia could provide growth in future.
Convert only debt.
L+600