All about converts

$600m (+90m) sen unsec cb coming tomorrow night from GS. Terms: 5y, 1-1.5% up 40-45%, put 3y, full pctns. UOP = $100m stock buyback/gcp. Stock +65% since 06/13 low w/strong Q3 nos & Q4 rev/sales upgrade driving an +11% move today. We do not question the biz buy only the market timing of another Chinese deal. QIHU & CTRP have yet to recover from NQ. QIHU for example backs out L+526 (35 vol) or L+622 (40 vol) having been L+206 (35%) at tightest point. We can not ignore the CRTP/QIHU spreads esp as both are real biz & bigger companies. We’d assume L+550. ADV=2.5m, 1/16 listed calls ~40 vol iv bid. 35 vol is right given –ve gamma. Theo = 101. UBS index w/make this a difficult one 4 OR though model/pricing appears to reflect recent events.