It is now clear that SFI's 2012 maturities are easily covered.
June 2013 is the real issue - about 744 million is due at that time on the 2011 secured facility and also about 502 million of unsecured bonds are due (with the highest coupon of any SFI bonds, less than 100 basis points lower than the new private offering of notes). Total of approx 1.246 billion.
If you run the numbers, it now also seems reasonably clear that SFI will have the cash to pay off the entire 1.246 billion due in June 2013 if they want to. This would have the immediate effect of making the June 2014 7% tranche of the same secured facility a first lien. This should allow SFI to immediately push back and refi that tranche at no more than 5%, further cutting SFI's interest expense.
At that point SFI would probably have no need to deleverage further. Also at that point their interest expense will have been drastically reduced and their cost of funding should start heading lower. A HUGE turning point in SFI's recovery.
this stock is a turd not an "investment" the ceo took 100 mil plus to run it in the ground....instead of paying the shareowners/risk takers... if sfi turns he'll grab another 100/m of YOUR $$$$$...
there are various boards where aud posts, and on every board the consensus is that he's an abused child trying to get back at everyone. he works at burger king and was promoted to head of fries in queens. he does make great fries!!!
Good post Golden.
IMHO, the banks will want to refi SFI's secured facility. Should management find itself in the very strong position that you expect, then SFI should be able to refi the secured facility early, get a lower rate and a greatly extended term of years.
That could represent the completion of the huge turn around in less than a year.
The turning point was March 2009, when SFI obtained more than a billion refi from JPM during the depths of the credit crisis. Refinancing the current secured facilities should, IMHO, represent a clean bill of health.
However, it is a little disappointing that SFI has had to issue 9% unsecured notes. Its hard to replace 5.5% notes with 9% notes. Perhaps SFI will refi these new 9% notes and the current secured line at the same time.
I'm sure it is the full-time job of several people at Istar to be looking for the most-favorable debt financing possible.
Jay mentioned returning to the unsecured markets on a call awhile back. Given its such a small amount, I viewed that issue as testing the market, staying active in that market, and maybe taking advantage of a reverse inquiry (pure speculation) from a high yield investor.