$250m (+37.5m) sen unsec cb coming tonight from GS, Citi, DB. Terms: 5yr bullet, 1.75-2.25% up 25-30%. UOP=pay down revolver, hedge V shape recovery reminder again: 9% in 2008 to 2% cpn in 2011. Co plans to double rev < 5yrs by becoming inv bank. Liq good = $690 of $1.2 revolver ext to 06/14 (balance due 6/12), $200m being paid, leaving $1B. PF Cash = 761, debt 660m, LTM ebitda 182m, fcf (115m). Existing 9% (07/13) ~390 using 33 vol. Use L+500. ADV = 1.75m. 06/11 calls ~35iv bid. Use 30v for 5yr. Theo = 100.625. hearing tighter spreads/higher vol out there bt w/9% its str8 forward to price. If you use 30 vol, u get tghter ics but then u can’t px 5yr vol thru that to get this deal to look cheap. Smallish size helps, but AVOID unless Cheaps.
Leading broker of exchange listed futures and options globally.
PF Cash $761mm
PF Debt $660mm
LTM EBITDA $182mm
LTM FCF -$115mm
Leverage 3.6x
Mkt cap $1.359b
MF has good niche franchise but competes against much larger comps incl Goldman, UBS, Citi, BAC. Jon Corzine joined as CEO early 2010 & just extended contract thru 2014. Profit has been weak since downturn due to reliance on trans volumes & interest rates. Strat plan to transform from broker to inv bank w/goal to double rev w/in 5 yrs, will increase risk. Liquidity ok, extended $690mm of $1.2b rev to 6/14, bal due 6/12. Proceeds to pay down rev, leaving $1B available.
Our assigned spread L+500