$275m (+25m) sen sub coming tomorrow night from GS/BARC. Terms 5yr, 2.5-3% up 27.5-32.5% full pctns. UOP=repay debt & w/heedge.
26 JV & managed brands w/stable royalties & strong FCF (FY11 exp $170m)
PF Cash =200m
debt =715m
LTM FCF = 157m
EBITDA = 211m
lev = 3x (no’s assume t/loan repaid)
We’d assume B+ & L+450. No leaps, ADV = 575k
pretty straight forward. mkt knows issuer
mkt still wants paper
BUY
ICON benefits from predictable royalty based income w/high margins & strong FCF generation. Expect +FCF of $170m FY11
Have been aggressive acquirer w/26 brands (incl JVs) closed since 2004. Most recent Ed Hardy stake upped to 85% for $55m cash
Proceeds to repay $111m remaining on term loan. Balance will go toward $288m 6/12 convert balance, which together w/FCF should be sufficient for repayment
Our assigned spread L+450