$200m (#0m) sen unsec cb coming tomorrow night from ML. Terms: 20yr, 0.25-0.75% up 37.5-42.5%, HC 5y, puts 5, 10, 15y. full pctns. UOP = gcp/working capital cap. $2.1B optical telco equipment biz w/stk +85% ytd. FNSR is a decent credit;
PF Cash = 483m
Debt = 240m
LTM ebitda = 164m
FCF = 51m
w/lev = low 1.5x & 2Q being the 5th quarter in row of rev growth. This beat expectations & co raised Q3 forecast. In short, we’d assume L+350 for 5y. there is an argument that you could use > 35 vol assumption so we’ll do both; 35 & 38, theo = 98.9 and 100.6.
Optics are a stretch w/low coupon in raising rate environment harder 2 make work (5y UST 2y dorward +150 bp). Primary weakness of late when pricing has been pushed. Maybe some o/r interest buy not obvious.