The unsecured note holders get the new equity so when they come out of BK they should be the ones that make out if oil rebounds. Not to late to buy some of them on the cheap.
Not bad, except that ridiculous number of $120bbl. Common and preferreds are most likely worth nothing, but not sure how you can say there is no reason for the bonds to go up. At some point it will become clearer what oil price will make BBEP profitable after the unsecured debt is wiped out (much lower than $120bbl) and this will drive the bond prices based on the unsecured note holders becoming the new equity owners. The price of the unsecured notes has already gone up 50%+ since the BK filing.
If you think they are worth so much, then go buy the bonds now why they are trading .06 on the dollar. You will be a new equity holder in the company after they wipe out all the unsecured debt.
That amount was the break up fee they had to pay to let the ETE merger happen.
I agree with that amount. This reimburses WMB for the break up fee they had to pay to WPZ.
At a minimum, ETE owes WMB the $438M breakup fee they had to pay to WPZ to make the ETE merger happen.
Again, have you looked at the recent bond prices / credit rating upgrade and financials for MEMP or are you just throwing out #$%$. They aren't anywhere close to a BK situation and I don't believe they will buy back any of their debt at current prices and create CODI for the unitholders.
Also does the required mortgage percentage increase keep them from selling more assets to reduce the credit line debt?
They have $40M of the $50 now, right. They just need to make the $17.5M per month + another $10M. It's going to be tight and depend on gas and oil prices over the next 6 months.
I think everyone is shunning MLPs right now because they are worried that the companies may buy back debt and create CODI for the unitholders.
The biggest problem with this stock is CODI. Let's hope no more debt swaps or any debt buy backs. VNR has punished the unitholders enough this year with the CODI already on the books.
If you are a unitholder (LINE, not LNCO) when the debt gets cancelled, you will get hit with CODI (reported as ordinary income on schedule K1). Worst part is when you sell the stock, you can increase your basis by the CODI amount, but it is a capital loss, and we all know you can only claim a maximum total capital loss for all investments of $3000 per year. If you have a big capital gain, then you can potentially cancel out all the CODI by selling your stock to offset captial gains.
May option expiration. If the market isn't liquid enough to close long put positions, then someone has to buy stock to sell.
May put holders had to close their positions today. If there is insufficient liquidity in the market to handle closing all the long put positions, then the put holders must buy stock so they have something to sell when the puts get exercised. This drives up demand for the stock and hence the stock price. Look for the stock price to head back down Monday.
Interesting article on Sandridge BK by Fortune (posted by yahoo under their ticker). It basically makes the case that many shale players are robbing the unitholders to shore up their balance sheets, because they can. It seems like they all have to do it to keep up with the competition. Only the BK judges can put a stop to this.