300m (+50m) sen unsec cb ocming tonight from GS, BAC. Terms: 5y 0-0.5% up 30-35%, full pctns. UOP=gcp/repay debt.$3.2bn domestic home furnishing retailer. Founded in ’79, it currently operates
70 retail stores & 17 outlets within NA/Canada. Stk +53% from 02
/14 low & +42% alone last week (strong Q1). JEF rates stk a BUY with an $88 target. PFcash=136.8m, debt=300m (assuming revolv is paid down), LTMebitda=88m, Net lev=1.9x. We’d assume L+325 4 5y.
ADV=945k, 01/16 same strike calls ~35iv bid, 1y 100/200d=45/44%.
We’d assume 35%. Theo=97.3/99.2/101.2. -VES=striking option post
+42% move, low cpn on un-rated credit & stretched valuation, but
pricing will be driven by demand for under represented retail
sctr. Like the product; not v cheap but could be v popular.