"The sale of the notes is expected to close on September 16, 2013, subject to customary closing conditions."
Raising the note offering from $200 to $220 in just a day, with the possibility of another $30 mil, this tells me two things:
1. Institutions are buying notes. They've been told why the need for the capital.
2. Why now, when they have said in the past they don't need additional capital till 2014?? Another China contract to be announced? A huge customer announcement about station build outs? (Remember at the last earning report cc, they said they had over 50+ deals on the table.)
I think we know more next week after the closing of the offering on MONDAY.......
Closing of the offering should be today, the 16th and from the SP reaction down from 13.06 prior to the offering to 12.41 now does not look favorable especially when today the DJ is up all day above 100+ points. what's your take whatssup?
I don't think a note offering is a bad thing. The more I have been thinking about it I have been wondering how CLNE (or any other company short of XOM, GE) can gear up station construction if CNG really takes off. For example one of the perfect fleets to target is the School Bus Market. There are 16,000 school districts in the US. If use took off and 1/2 the fleet was to change in the next 10 years that would mean 800 new stations a year just for school buses. CLNE building 150 per year for ALL of the country is not going to work if we get wide spread public acceptance.
In My Opinion within five years they need to be able to roll out 300 - 400 stations per year which is going to take a lot of capital and more note offerings down the road. It takes the need to raise more capital as possibly a sign that they are being overwhelmed with opportunities.
I am sure they are working on it but for small fleets of 30-200 vehicles they need to come up with some type of skid mounted system where the user can pour a concrete pad on site and all they would have to do is drop the skid onto the pad and connect to a NG connection. That's the only way they could possibly meet demand if we start getting widespread adoption.
Also if I was CLNE I would lock in long term money as much as possible with interest rates low. They will only be higher five years from now.
Likewise, I don't think the note is a bad idea and @ 5.25% if it is used solely to expand the construction of CNG stations. Like you pointed out I have mentioned numerous times that this management should target School Fleets as the long term benefits are great for the supplier and the users. What big school district would not want to save millions in fuel, cleaner air, and be able to put the saved money back into education and save taxpayers few bucks in increase for school taxes.?
I was glad to see a school bus contract announced last week. Have they overlooked this market? Why? Why wait for LNG trucks to be built and open new stations when there is a market waiting to jump at a good opportunity and change their entire fleet?
I hope to see them going after this market , as well as reducing their high compensation, and put this money to develop long term contracts /Stations that will generate immediate revenues for the company and its shareholders and not be spent to make management Millionaires while the company is still losing money Balanced FISCAL responsibility
This is very good interest rate for a new technology adoption king of company. It tells me that revenue is proceeding better than they had indicated in the last conf. call. Remember Buffett had bank of america at 6% and also warrants at existing price around 7.75 for 10 years. This is at 5.25 with a 25% premium and only five years. This transaction tells me that they will be a major force in NG industry and this is to finance more LNG plants I think and not the stations. Station will grow at 20% a year to fill out routes from carriers and no more than that. ( my guess).