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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Mike Buckley who wrote (9060)	10/28/1999 10:59:00 AM
From: chaz	Read Replies (1) of 54805

Hi Mike: The following was PM'd to me...about a month old...but I don't recall seeing it here. The correspondent is one of our soon-to-be-addicted lurkers. Before I join the thread, here is a piece of information you can share with people if someone did not already post it last month. I got this from ML's site: Siebel Systems 5.5% 9/15/06 (144A*) On 9/15, Siebel Systems (SEBL, $69.875, no opinion) priced $300MM of a subordinated convertible debenture. The issue came at 5.5% up 27%. Demand appears to have been strong as the deal size increased by $100MM and the terms came in at the least favorable level for investors (price talk had been 5.5-6.0% up 23-27%). The issue matures in seven years and is non-callable for the first three. Neither Moody's or S&P has rated this issue. Based upon our assumptions of 40% volatility (capped) and 1000 basis point credit spread over the 5-year US Treasuries, we estimate a theoretical value of $97 (2.94% rich). [end of ML information] In case people do not know, 144A convertibles are considered restricted issues in that only institutions and private individuals with net worth more than $100 million can buy them.

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