Merrill adds Union Pacific convertible to model portfolio

By Ronda Fears

Nashville, Dec. 9 - Merrill Lynch & Co. convertible analysts added Union Pacific Corp.'s 6.25% convertible preferred to their model portfolio as an equity alternative, following the addition of the stock to the Merrill Lynch Focus 1 List recently.

"The convertible provides no call protection and is currently callable at $51.04," said Yaw Debrah, head of U.S. convertible research in a report Monday.

"However, the stock has room to appreciate approximately 31.5%, or to $77.5, if we assume the issue will not likely be called until parity is greater than 110% of the call price of $51.04."

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