$1.2B (+$180m) sub cb coming tonight from Citi/JPM. Terms: 5yr: 3-3.5% up 27.5-32.5%, 7 yr 3.5-4% up 27.5-32.5, pctns. UOP = capped call/repay debt. Yet to recover from downturn/slow upturn w/sale & ebitda -35 & 50% btw 2007 and 2010. At this level of cap/structure you must really back US housing mkt recovery. 5yr sen CDS (inactive about 475), existing 4yr cb came 4.875% up 30% now 100 vs 8.6 (4.53% up 52). L+650 = 29.5 iv or 35 vol = 780ics. Could argue 4 to 7yr curve is flat @ sub level but we don’t agree. Use L+725/800 for 5/7 yr. We assume 35v% for 4y (01/13 10c=42iv bid), we’ll discount 5/7 yr to 32 & 30. 5 yr = 101.875, 7 yr = 100.8125. Really diverse opinion on inputs. No obv switch 4 to 5/7. Primary needed but unless cheaps, mkt will be flippin
#3 cement company in the world, with capacity of 96.4mm tons. offerings include cement, ready mix, and concrete aggregates.
PF Cash $676mm
PF debt $16,421mm
LTM EBITDA = $2314mm
LTM FCF $387mm
Leverage 7.1x
Mkt cap = $8890mm
CX was hit hard by global downturn & yet to recover w/2010 sales down 35% & ebitda nearly down 50% from FY07. Recovery slower than expected espec in US w/weak housing mkt & budget cuts affecting infrastructure spending. Liquidity is issue w/12b debt due by 2014, incl bank agreement. $1B secured issue in Jan w/converts will get the co thru next 18 months or so.
Covenant violations could become a problem once again
Our assigned apread 750/800