Assuming that the credit spreads are slightly better in 2012-2014 but not back anywhere to where they were a few years ago... Won't it be tough for Isle to roll its debt without issueing a ton of stock since its debt/equity is so high. And wouldn't the debt new debt go off at 10-11% which would be 3% higher than current?
This is my major concern with ISLE, as revenue did not decline nearly as bad as I would of expected during this depression.
I understand your concerns and you do have to be careful with leveraged companies,but imho trying to forcast interest rates 3 years out is just not possible. Isle was one of the few and maybe the only gaming company that was able to buy back bonds @56 cents on the dollar. If ebitda stays even at 196 million (and I look for improvement with colorado limits coming off next month)isle will generate cash flow of 65-75 million this year, if the seminloles sign the compact there will be a $15 million dollar boost next year from Pompano,an aquisition could occur,even a stock offering with the proceeds used to pare down debt may not be as bad as you think,there are only 31 million shares outstanding, My point being the world is very different from 3 years ago and isle's balance sheet will look different along with lending standards 3 years from now. good luck