All about converts

$300m [+45m] senior cb on HCN from UBS & DB pricing tonight Terms: 20yr, 4 3/8- 7/8% up 20-25%, nc5y, puts 5/10/15, dvd & t/o prot. Proceeds to buy additional properties & repay credit fac. HCN has 477 facilities in 38 states. 5yr CDS @ 55bps. Weekly vol is 17%. Listeds are scant. ADV stinks [285k]. On avg, REIT universe implies 16% vol. We’ll go w/that. Borrow is not normal UNLESS you p.b. through u/w. Much is tied up w/stk arb guys [HCN buying Windrose.] An avg, borrow fee=1 3/8, but MAY turn normal when deal closes [yr end?]. Using 138 fee, theo=97 7/8/99 1/4/100 11/16. REG borrow=98 3/4/100 1/8/101 3/4. Unless reg brw, who wants another REIT, w/uncertain brw, when you have so many other deals to choose from? We’re sick of REITs unless cheap. >AVOID< otherwise