01-22-14 Colony Financial (CLNY)

$200m (+30m) sen unsec cb coming o/night from MS. 7y, 3⅝-4⅛% up 10-15%, s/call y5 @ 130%, full pctns. UOP=repay revolver/acq/ gcp. Stk +10% already ytd. Existing 10y $200m CB came 04/13, 5% up 10% w/stk @ $21.45 (s/callable w/130% trigger 04/20). Went out

~107.5 vs 22.06 they back out ~L+356 using a generous 20vol.  PF cash=48m, debt=352, LTMebitda=42m, lev=8.4.We’d assume L+300 for this new one (shorter dated). Highly correlated to tapering/ir conditions (go back to 05/13 & see what tapering speculation did

2 stk). ADV=820k, no leaps, we’d use 20vol. Theo w/stk -3% & -5%

=98.4/100.4/102.3 & 97.8/99.7/101.6. Not gr8 for existing CB but

new s/dated, better optics, higher theo SBV. O/R support will

help stk pressure (similarly 2 old) so will/should get done.

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