06-24-14 Mercadolibre (MELI)

$300m (+30m) sen unsec cb coming tonight from GS/JPM/DB. Terms: 5y, 2¼-2¾% up 32½-37½%, full pctns. UOP=note hedge/gcp. $4bn LatAm e-commerce biz & largest online mkt/auction platform thru its MercadoLibre Marketplace. Founded in 1999. it operates in 13 Latam countries (as of 12/31).Stk -36% since 10/13 high (EBAY =17% stake) & Venezuala’s currency deval was a factor (accounts 417% earnings). Despite this, earnings growth was +16.75 in LTM & exp 2 be +24% p.a 4 next 5yrs.Main risk=AMZN/EBAY entering mkt Credit wise, we’d assume L+500. ADV=660k.01/16 samestrike calls= 38/42iv, 1y 100/200d=40/41%.Brw=1-3% so we’d assume 2%. We’d dsnt vol to 35%.Theo=98.5/100.2/102. LatAm growth play (& not CHINA)

w/appeal2 many so this won’t need to go to AUCTION !

Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>