$300m (+45m) 144a senior cb pricing tonight from Boa/JPM. Terms: 7 yr bullet, 3.75-4.25% up 32.5-37.5, prot, UOP = pay down credit fac & buy back stock HAPPY MEAL. FNF is first in US tital insurance, Stk was up 5.7% yesterday on earnings. Stk not seen this level since Fall 09. Straight trade around 300 over. ORI ’18s a decent comp which also trades 300 over but is rated 2 notches higher. So we’ll use L+350 (See credit color), Stk is not very volatile. 2 yr 90d 50/10ile = 28/18.
For 7 yr credit, we’ll discount to 20v. Theo = 99.5. Exp a low IG rating too. Model (& tape) says ” mids”, we see profile appeal but we see stock and premo too. Jusr cuz its new, doesn’t mean it has to trade at a premo to this tape.
Title insurance and specialty insurance provider
PF Cash $567m
PF Debt $1036m
LTM EBITDA $637m
LTM FCF $99m
Leverage 1.6x
Mkt cap $3.723m
FNF is largest US title ins co w/~38% share accounts for 2/3 rev. Rev & eaarnings under pressure recent yrs due to strong correlation to housing mkt, but co has performed well due to disciplined underwriting & cost cutting focus. Co willingness to cut divs helped w/liquidity. Amended rev 3/10 extending mat to 3/13 w/total line $951m w/$750m available after conv deal. Investment portfolio is high quality & liquid w/80% cash & invgrade bonds. Selling flood ins biz for #210m
Our assigned spread = L+350