06-05-14 Illumina (ILMN)

$900m (+135m) 2 tranche sen unsec cb deal coming tomorrow night from GS/BAML. Terms: <A> 5y, 0-½ up 50-55% <B> 7y, ½-1% up 50- 55%, full pctns. UOP=repayment of existing .25% cb/gcp. $20.5bn mnfctr of genetic sequencing eqpmnt, founded ’98. Stk -12% from

02/14 high but still +1.4x in LTM.Existing .25% CB ~195⅞ vs cls

=0.13% up 1.7% (3.25pts) & ~43iv using 75bp thru middle. We’d

assume L+100/125 for 5/7y respectively. ADV=1.8m, 01/16 upside calls >40iv, 1y 100/200d=48/40%. Clearly a vol dampening event we’ll dscnt 5/7yr to 35vol.Theo=<5> 100.1/101.7/103.4 <7y> 99.5/ 101.7/103.9. Conceptually a good name (tight crdt/high vol 4 h/f & opp/4 o/r to restrike a popular stk @ par). Optics obv not gr8 but not surprising.Would prefer 1x1bn 4 index BUT w/have no prob

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