All about converts

$100m (+15m) sen unsec  cb coming tonight from BOA/CS. Terms: 7yr, 2.73-3.25% up 27.5-32.5%, full pctns. UOP = gcp/working capital. $650m specialty pharma focused on weight loss prevention. Stk +53% from 11/05 to 11/29 w/its main frug expected to get approved in mid 2014. Tough 2 judge binary credits like this on historic data (nothing approved, no rev therefore no EBITDA w/$25 cash burn this qtr). Street expects FY 16 sales of 86m which would make them EBITDA +ve. We’d assume L+750. ADV = 13.m, no OI in leaps. Obv a volatile stk but given binary nature, need to cap vol at 35%. Brw moved just off top post deal announcement, we’ll assume GC/ Theo = 102.6. Would prefer 5 y structure for this credit. However, there will be many who will want access to this story.