$100m (+15m) sen unsec cb coming tonight from JPM/MS: Terms: 5y, 5¾-6¼% up 10-15%, full pctns. UOP=gcp/acq. $750m diversified CRE REIT founded in 2005. Let’s look at comps in CB world; IVR = $2bn mkt cap. Came 03/13: 5y, 5% up 15% now ~93=ICS ~L+585 (22%) NLY=$10bn. Came 05/12: 5% up 15% now 1.6y, ICS ~L+330 (22%). RWT =$1.4bn. Came 02/13: 5y, 4.6% up 20% now ~101½=ICS ~450 (25%).
We’d assume L+575 for 5y RSO. ADV=1.7m, no leaps. 1y historical 100d=25, 100w=22.8, we’ll use 22%. Brw=gc. Theo=99.8/101.3/102.8 Div pctn > 20c but decreasing yields = decreasing divs (41c qtr in ’07 to 20c in ’13). Small deal, high 94.5 theo SBV, optics = little trouble getting placed. Hearing L+500 assumptions being used (=103½ mids). Tough given comps BUT won’t change outcome.