$135m (20.5m) sen unsec cb coming tonight from BAC
UOP = hedge/opportunistic 2% repurchase. Terms: 4yr, 3.5-4% up 25-30%, full pctns. Biz=patent/royalty stream shell co (both expire by 12/14)
Mgt evaluating longer life royalty stream > 2014 o/wise biz over.
In mean time, co returing cash to s/holders & redeem 2%.
After 12 $92m 2.875% 15 & new cb w/be o/standing
Risk = further lawsuits (agreed 2 pay MEDI $92.5m, Novartis & Roche 2 come) Cost of acq streams big unknown. We’d assume CCC L+700
Sporadic litigation headlines = vol o/wise high div/royalty shell = no vol. Dscnt to 25vol.
AVOID