$100m 144a unsec sub cb pricing tonight from JPM/Opco. Terms: 7yr bullett, 5.75-6.25% up 15-20%, protections. UOP=gcp incl pay down debt & capex funding. As part of bank deal in OCT, co req to repurchase ~100mm of old cvt by 12/12. This enables them to do that (see credit color). New Term Loan came L+400, so for 7 yrs we’ll use L+650. No leaps, 2yr 90d 10/50 ile = 26/33, ADV ~452k. Small mkt cap, high div yld & illiquid stk, unlikely that you buy your deltas back on way down, so we’ll use 28 vol. Using 75bps brw (not gc), theo = 98.25. Small deal, limited audiance, but deal will get done. If you like stk, then buy it if you can. We’d pass on this deal, for fear of being left out in the cold on the way down
AVOID
Provides wireless, wireline & other telecom & tech services.
PF Cash $112mm
PF Debt $665mm
LTM EBITDA $123mm
LTM FCF $51mm
Leverage 5.4x
Mkt cap $419mm
ALSK experiencing comp pressures in wireline & wireless biz. Wireless from iphone & possible entry Verizon w/4g network in future. Wireline driven by line losses from cable and wireless sub. Focused on increasing enterprise biz, but GCI (cable op) has dominant mkt share. Plans to launch 4G which will increase spending. New bank line entered 10/10 w/$440mm term loan & 30mm rev (not drawn), maturity to escalate to 12/12 unless refinance $100mm of older converts – reason for new deal.
Our assigned spread L+600