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Crosstex Energy, L.P. Message Board

  • ross.john51 ross.john51 Jan 26, 2010 4:35 PM Flag

    AH News

    XTEX (instead) of refi through banks is issuing $700 in unsecured notes due in 2018.

    After selling these notes, XTEX will be debt free.

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    • Definitely a more detailed article than I read.

    • Tell me about the covenants...just how much are they costing the company now...vs. what they are expected to be paying after the notes are issued.

    • "Personally, I think this management is kicking some you know what. They have pulled this company out of a deep hole and may just make this a highly profitable company for the long-term. That is why I am loaded with stock (mostly XTXI."

      Indeed, we may fail to give the company credit for just how much they have done since they found themselves in trouble. It's really been a great deal of positive work in a short period of time. That's creative management. We should expect more of the same in the nature of growth. The future looks good.

    • Ross,

      This is a link to a longer version of the article from Bloomberg that I got off their site. It lists XTEX as an unrated company looking to sell debt.

      Jim

      http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=XTEX%3AUS&sid=a6_l7zio0bzc

    • It was right at the end of the article and I did not see anything in the article about not rated or anything else.
      It was a positive article.

    • Ross,

      Where did you see that Bloomberg rated the notes "Investment Grade"? You posted a link to a Bloomberg article on XTEX selling notes in a previous thread, but I did not see where Bloomberg called XTEX "Investment Grade"? As a matter of fact, that article lists XTEX as "Not Rated", as opposed to "Investment Grade" or "High Yield". Thanks.

      Jim

    • BTW, if Crosstex is going to be paying 9+% interest on these notes, then Lisa is wrong that they will not sell out in a hurry...if to no one else people on fixed incomes, because Bloomberg rated the notes as "Investment Grade".

    • I wonder how much money Crosstex will save not having all the entanglements, covenants, etc. from the banks annually.

    • Ross, Yes. The report is a paid report so I cannot cut and paste. Key takeaways are that they ( Morgan Keegan) see this as an over-all positive move. Bank debt removed, therefore should improve financial flexibility. Their original dividend forecast was Q4:10 and they believe that it could be moved up to Q2:10. Assuming a 7.5x- 9.0X multiple 2010E EBITDA will indicate a $11-$15 value for XTEX. Everything is based on assumptions using 9% interest because no details were given as to interest rate or premium/discount price.

    • I think you are right about stocks pulling back. However, Bloomberg says that the high yield bond market will take off. I am not worried one iota about XTEX selling all these notes if they are going to pay 9% or even 7 or 8%. People are freaked out over not knowing what the equities markets are going to do...well its pretty certain that the recession is not going to a V recovery but rather a W. Thus people are going to buy these bonds because they know their money will be relatively safe and it will provide income to those living on a fixed income.
      For those who have written they are not sure that all the notes will sale, I point them to the financial news that BA/Merrill is chomping at the bit to get their hands on some, maybe a lot, along with a lot of other fat investors. You can bet Blackstone knew their would be a market for these notes. The only question I have is if the interest is 9% what does that do to the predictions of a .25/qtr dividend? Improve or worsen the chances?

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