$250m (37.5m) sen unsec cb coming tonight from BARC. Terms: 7y, 4.5-5% up 45-50% full pctns
UOP = repay debt/gcp
11 year old, $1.5B metallurgical/thermal coal producer.
PF Cash = 1.01B
Debt = 3.47B
LTM EBITDA = 444m
LTM FCF = -179m
Gross lev = 7.8x
CB pari w/B- 9.75% 2018 which back out L+675. We’ll assume L+725 for 7y CB. ADV = 12m 01/16 10c ~59 to 62 iv w/all vol metrics >45 vol, we’d cap 7y@35%. Theo = 104.8 or L+923
Mids SBV/Delta = 75 & 75 d respectively (Jump /default = 49c). Big coupon offsets lumpy premo = model cheap BUT has to be (COAL hardly a hot sector). Market has the historic data from an aggressive sell off and it was not pretty. Would prefer 2 c 5y vs 7y 4 obvious reasons but will get done. PX sensitivity