$150m (22.5m) sen unsec cb coming tonight from JPM/RBS. Terms: 7yr, 1.5-2% up 22.5-27.5% full pctns. UOP = repay portion 3.25% CB/hedge/gcp. $700m S&P BB rated PPCB manufacturer. Currently #6 in the world w/top 20 only controlling 43% (comps=SANM/FOXCONN).
PF cash = 390m
debt = 695m (all 3.25% CB included for now).
LTM EBITDA = 170m
FCF = 20
Gross lev=4x
1st lien term loan L+238
Existing 3.25% is 101.5 pre announcement, backing out L+210 (30 vol)
We’d assume L+450 for 7 year.
ADV = 320k, no leaps, 1y 100d = 37 but short dated has been lower.
Small market cap, low ADV, 7y duration & -ve gamma concerns mean capping vol at 27%. Theo = 100.7
May argue 30 vol = 102.6
Small deal that will have sponsorship. Last week we saw some sensible pricing return