Omnicare (OCR) new issue 12/16/10

$500m (75m) sen sub cb coming tonight from BARC/GS/JPM.
Terms: 15 yr, 3.5-4% up 20-25%, s/c 8 yr@120%, full pctns
UOP = buyback $525m 3.25% convert. Another b/e trade but with o/r interest 7.75% 2020 sub straight oas = 464 (mid)., 10 yr sub CDS = 450-475 & 4% prf = 690 ics (25 vol). For the purpose of model only, we’ll use L+500 & 25 vol. Theo = 105.125.
On mids, it breakevens just inside softcall, but so do MCHP, VRSN. Going to keep this short: BE traades are b/s intensive & tend stay cheap unless there is o/r interest (why VRSN and XLNX outperform MCHP). We believe there will be o/r interest, but we would care mids or better

By convertarb, on December 16, 2010 at 4:59 pm, under Convert New Issue Analysis. No Comments
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