$500m (+100m) sen unsec cb coming tonight from DB/GS/WFC/BARC.
Terms: 5.6y (01/15/20), ½-1% up 25-30%, full pctns.UOP=cb hedge $350-400m 4 acq/dvlpmnt. $5.2bn renewable energy co w/stk +75% since A/B issuance in 12/13. Existing 4.3y A=L+470 (148⅝ vs 19/ 40vol), 6.6y B=L+615 (151⅞ vs 19/40vol). PFcash=1.09bn, debt= 1.45bn, LTMebitda=(55m) FY14/15 exp 289/481m respectively. We’d assume L+525 for 5.6y, ADV=9.4m, 01/16 calls > 50iv, 1y 100/200d =60/60%. We’d assume 40vol. Theo=100/102.2/104.5. Existing A/B left index (>140) so much of the change of ownership has already taken place so don’t exp 2 much weakness (unch at moment). Index
inclusion plus ability to restrike for l/only=obvious demand.
Conclusion; NEW will do well & h/funds will buy any A/B weakness