$300m (+45m) sen unsec cb coming tonight from BARC/JPM/MER/CITI/
MS. Terms: 4.5y, 3¾ +50%, full pctns. UOP=debt buy back/gcp.
We’ll be quick; Existing 2⅜% 15 went out ~95.5 pre-deal which backs out ~L+450, pari 9¾% ’18 with OAS of ~660. We’ll assume
B+ and L+675. ADV=16.7m, 01/15 same delta calls ~60iv bid, 2y90d
10/50%ile=58/76%, we’ll use 35/40% to model. Stk -6.5% today on GS downgrade & $1.5 off it’s 2 yr low of $5.28. We will not take stk down given move already. Theo using 35/40vol=102.25/105. Mkt run off overtook issuance recently, it needs/wants par paper. We hear existing cb bondholder demand who will look to switch. Less obvious 2 o/r given stk/sctr performance but this will do well.
>BUY< (BBG/CO FILING) ANR…its for MEE, MEE, MEE……