All about converts

$100m (+25m) sen unsec cb coming tonight from BOA. Terms: 6 yr, 5.75-6.25% up 25-30%, sc 4 yr@130%, pctns. 30d term swap. UOP = 3.5% b/back, hedge. $450m niche playa w/recurring rev streams in mkt with high barriers to entry 4 overseas co’s/ Mgt felt turnaround was not being reflected in $200m str8 pricing so deal was pulled in sept (B+ S&P rated). No quarterly data but co fcf +ve on f/yr basis.
3.5% 11 L+400, 4% L+1000 post announcement. Credit/vol relationship = higher vol/wider credit but ADV=280k & brw is big issue (1-2.5% & v thin). We hear 40-45 vol assumptions but how do you capture that? Name has core following, not a h/f model trade. 4 those who will model we’ll use 1000/30%/150bp. Theo = 102.7
Good credit brw call, small deal will get done but we prefer 4% to play