$125m (+18.75m) reg sub cb pricing tonight from DB/GS.
Terms: 5yr bullet, 3.25%-3.75% up 20-25%. Concurrent 18m common offer, A123 Systems makes advanced batteries & energy storage systems for cars & electronic grid serv. Company went public in 2009.
Stock hit a high shortly after ($25.77) & languished since (down 20% since deal announced). Spending heavily on bet of future demand using govt subsidies to fund 50% of cap ex. Project +EBITDA in 2013, but unclear if/when FCF turns +1.5yrs of cash left $700m mkt cap. 1000 over credit but will dispense w/model. Stock brw hi (8%) & may not improve much post placement. Deal getting done depends on equity view. Crunch candidate into stock pop. Need AONE sauce on this to make it edible. AVOID.
Advanced rechageable lithum-ion batteries & energy storage sys, used for transportation, electric grid srvc & comm mkts
PF Cash $259m
PF Debt $163m
LTM EBITDA -$132m
LTM FCF -$305m
Yrs Cash 1.5yrs
Mkt Cap $732m
AONE is a start-up that just went public 9/09. Co spending heavily to expand capacity ahead of anticipated future demand leading to significant cash burn. Received DOE govt grant to fund 50% of cap ex, received $87m in 2010 w/$162m to go. Also working on $233m govt loan, would pay 80% of cap-ex. COmpeting w/jv of much large cos (panasonic, LG, Samsung) Co project +EBITDA 2-13, uncertain if/when FCF turns positive.
Our assigned spread L+1000