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American Capital, Ltd. Message Board

  • im_so_vain_2000 im_so_vain_2000 Oct 15, 2009 8:26 PM Flag

    300 million in debt paid

    "This exit of HomeAway is one of over 20 exits of portfolio companies since the beginning of the fourth quarter of 2008," said Malon Wilkus, Chairman and CEO. "These exits have helped us accumulate substantial liquidity in this market, while reducing our debt by approximately $300 million over the same period."

    Great. At this rate the 2.1 billion in unsecured debt will be paid in 7 years.

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    • keep in mind that a large portion of the debt paid back may very well have been to secured lenders first.

    • Come on acas is just trying to keep the dogs from the door..... they are selling the best of there holdings and will be left with only the worthless companies....... Oh well at least it will delay bankruptcy..... for a while..... IMO the chance of the company staying in business is less than 10%..... at the very least it will be many years before anything good happens here.....

      • 1 Reply to tradervic1963
      • The arguement that ACAS is selling off the good stuff and shareholders will be stuck with the bad is an old theme predating the recession. It wasn't true two years ago either. It has always been utilized to cast dought in shareholders minds. No more reason to believe it now than before. Just more crap. Kind of like telling us we should be in the "good" BDC's who are cash flow negative and not in ACAS who is Cash Flow positive. Take a little time and look at the data yourselves so as not to be taken in by this nonsense.

    • hahehihmhohu Oct 15, 2009 11:35 PM Flag

      if i have to hear Malon Wilkus' fingernails-on-chalkboard voice spewing this kind of crap one more time, i'm going to start praying for an errant bullet from a driveby shooting to strike me dead and put me out of my misery.

    • Actually, its worse than that... total debt on the books at 6/30/09 is $4.321B.

      So closer to 14 years to fully repay at the present rate.

      The $2.4B often discussed is in fact the total debt that has become due within the next year as it relates to the technical defaults.

      You can find this information on pages 3 and 50 of the June 30, 2009 10Q.

      One question is whether ACAS repaid $300M in debt or do they count debt repurchased at a discount as part of paid debt. Page 51 discusses $20M of private placement debt repurchased for $3M thus a $17M gain recorded. Does ACAS count debt repayment as $20M which was originally owed or $3M?

      The answer to the question about debt repayment is about how many good strategic M&A assets they have and can identify potential buyers. This is going to take a long time.

      Further reading on pages 51-53 show clearly why ACAS may not want a debt accord. The default debt rates are much better than they will eventually get in a debt accord if ALD's debt accord is any guide.

      The best guess is ACAS is going to hold that liquidity as a bargaining chip with the banks. But this too can be a dangerous game. If ACAS were to get say $1.5B of liquidity if I were a lender I would make a demand and then force BK knowing you could get your hands on a lot of free cash. Its going to be a giant game which is only complicated by the recent forebearance.

      • 4 Replies to ferdiefor
      • ACAS doesn't owe $2.4B by next year.
        This is BS.

      • prop up are "unsecurred".... they hold I.O.U's not deposit slips. You side step the 200% equity threshold everytime you make a statement. If ACAS in fact has gained 1.5 billion in liquidity while retiring 300 million in debt then ACAS is on course to rectify the debt/equity imbalance. ACAS does not need to sell the store to acheive compliance nor do they need to comply with these lenders in order to re-fi debt with many other 5000+ private/public institutions.

      • ferdie-No one cares what you think you know. All you do is mix facts with assumptions, dilutions,and how you think things are. 90% of what you post is not based on anything more than what you think is happening or taking place. You don't have any real inside knowledge. So all of your assumption and speculations are built on sand. But you post them as if they are truly valid and factual. Which they are not. Your not just trying to state your opinion. I don't know what your looking for. All I know is that your a pest. Please take your bitterness and spite to another board. Give this one a rest, please.

      • Good luck to all you shorts, hope you have a chance to recover
        tomorrow morning.

    • 20 exits of portfolio companies since the beginning of the fourth quarter of 2008. Their web page shows the following exits.

      10/15/2009 American Capital Receives $15 Million in Proceeds from Sale of Equity in HomeAway, Realizes $4 Million Gain
      09/16/2009 American Capital Receives $182 Million In Proceeds From Sale Of Axygen BioScience
      09/14/2009 American Capital Realizes $16 Million Gain From Portfolio Company Exit
      07/16/2009 American Capital Completes Sale of People Media, Receives $57 Million in Cash Proceeds and Realizes $15 Million Gain
      05/05/2009 American Capital Realizes $31 Million Gain From Sale of Piper Aircraft
      04/14/2009 American Capital Receives Cash Proceeds of $22 Million From Sale of Corrpro Companies

      Anyone remember any other exits besides the BKs?

      Could we be are in for more exit announcements? It only took 6 weeks to announce this one.

      • 1 Reply to neschuyler
      • It is unlikely that the creditors will force bankruptcy because they will only be harming themselves. If that was their strategy, they would have done that by now. In bankruptcy, payments to the creditors will immediately stop until the judge can approve a workout plan. Since the creditors are generally unsecured, their leverage is minimal. In bankruptcy these loans would become "non-performing" on their balance sheets which would hurt their financial results and be a hit to their stock prices. It makes little sense for the creditors to take that trade off vs ACAS being current on their loans and collecting penalty interest, making the loans highly profitable for the banks at the moment.

        Besides collecting bonus interest, the creditors are getting their costs related to renegotiating a new deal paid by ACAS, and the end result will likely be a better deal for the creditors than they had before the default. In bankruptcy, the creditors would incur substantial new costs, further reducing their profitability of their loans to ACAS. Why would they want that?

        How bad the new deal will be for ACAS depends on many factors, but I believe their new deal will be somewhat better than what ALD agreed to. ACAS has generated huge amounts of cash which gives them flexibility in paying down debt, buying back debt at a discount, etc.

        The third quarter results and ACAS comments about the future will set the direction of this stock for the next few months. I am hopeful the huge writedowns are in the past and that we will get a more positive spin from management on the near future. I also believe more portfolio sales will be forthcoming in the short term, further increasing their odds of an acceptable renegotiated deal with the creditors.

        Finally, the argument that ACAS is being hurt financially by selling their best portfolio holdings and being left with the "dogs" has little merit. The worst performing companies in their portfolio have already been written down to low values, and many of them likely have more upside potential than their best holdings as they go through a workout period. Further, ACAS has many holdings and have only sold a handful. They still have a mix of high performers and companies under stress.

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