On the conference calls, none of the analysts ever presses the Landys to return capital to shareholders via a dividend increase or share buybacks. While the current yield is quite nice, its been stuck in neutral a long time. The yield is high because the dividend doesn't increase, and investors know it is unlikely to go up significantly.
Just because Fidelity doesn't have shares available for shorting doesn't mean other brokers don't have shares available to short. In fact, you can bet that a lot of the decline since the bond sale is due to the buyers of the converts have shorted enough stock to lock in a hedged profit. That seems hard to do with a large dividend every month to deal with, but certainly not impossible. Buy the converts at 3% yield, short the stock and short enough options to cover the dividend payments. That's most likely how the converts got sold, and there's no reason to expect it to show up where you can see it on a retail screen.
If there is no reserve, perhaps there is insurance to cover come of the damages. They had some coverage for Macondo.
I recall that APC has reserved funds for this outcome of the TRONOX case, but not how much. I think it is 2 or 3 billion dollars. Credit Suisse reported on the reserve in a report last summer, which I can't find at the moment
KMI’s board of directors has approved a share and warrant repurchase program authorizing KMI to repurchase in the aggregate up to $250 million of its (i) Class P common stock or (ii) warrants to purchase shares of its Class P common stock, which are currently trading on the New York Stock Exchange. This $250 million repurchase program is in addition to the $350 million share and warrant repurchase program that the board approved in July of this year, of which approximately $16 million of capacity remains. In aggregate, KMI has repurchased approximately 158 million warrants, and approximately 348 million warrants currently remain outstanding.
At the very end of the conference call after the sale of the TX property to PVA, there was a very brief comment that one use of the PVA proceeds could be to call in the MHR-D shares at the call date in March, 2014. Has anyone heard or seen any update to that (very brief) statement? I own some D shares, and am happy that the divvy has resumed. The total return from here to the March call date (divvy +3.50 cap gain) is very enticing if the call happens, and I'm tempted to buy more D. But the market doesn't seem to be anticipating a call in in March, else the price would be closer to $50. Anyone have any insights?
Enough to short 384,000 shares and lock in a comfortable income, especially if he's short synthetically. He's a smart puppy.
It's being shorted against the new converts. Support looks to be in the 13.50-13.75 range according to large orders waiting to fill.
On the cc, MHR said the C would be called soon, and possibly the D when it reaches its call date in March.
The D shares may not drop in price. A previous cc mentioned that the D shares might be called in March. If there is indication that they will be called, and the div. is brought current, the D shares will move up to their YTM value.
Nothing about the warrants' exercise price is straightforward. Currently (July, 2013) the exercise price is a bit over $9.56. The warrant aggregate is 1.02+. The conversion ratio is dependent on the closing price of the stock on the day the warrant agent receives an order to exercise. The reduction in the exercise price is a fraction of the excess of the dividend over the base dividend of $0.05, and depends on the closing price of the stock on the close prior to the xd date. You cannot know how much the warrant exercise price will be reduced until you know the closing price on the day prior to xd, and you might not use the same price that the warrant agent uses since there are variances in quote services. These are some of the most complex warrants ever. But they will improve in the owner's favor so long as HIG pays a dividend greater than $.05/qtr.
"ECONOMICS AND RISK SHIFTING SKEWED TO BENEFIT OF EXISTING UNITHOLDERS
LINN has done a fine job of pushing its maturities into the future; no material unsecured debt matures for seven-years. It has also aggressively hedged its future
production through 2017. In a non-E&P MLP vehicle, this would provide the liquidity to protect a drilling program and prove up incremental value and debt
coverage. In an E&P MLP, a case can be made that it protects the distribution - especially those of the existing unit holders. If LINN adds reserves at only one third
the rate at which it has over the last three years and increases its distribution only $0.10 per year, the existing unit holders will have all their initial investment
returned on a cash basis before any unsecured debt is retired. This is the perfect call option: free. Looking at the corresponding put option, the debt: the underlying
commodities have very high volatilities (over the last five-years Henry Hub spot gas has ranged from $1.82 - $13.31 and WTI crude, $30.28 to $145.31), the
duration of the put option (debt) is lengthy (post existing unitholders cash on cash capital return), and LINN is aggressively leveraged. The probability of TEV
diminution because of volatility impacting the debt cushion is considerably different and higher than when LINN was levered at 38% debt/capitalization. In that
event, today's existing ownership, with little/no remaining cash invested but still owning a majority of the company, will likely have a different and greater risk
tolerance than that of the bondholders of the soon to be maturing debt."
Penn Virginia Corporation (PVA) today announced that it will release its second quarter 2013 results after the market closes on Wednesday, August 7, 2013 and hold a conference call / webcast on Thursday, August 8, 2013 at 10:00 a.m. ET.
This could make MHR suddenly richer if PVA reports good results. Since MHR knows what it sold to PVA, and is holding on to the PVA shares, there is a reasonable chance that PVA will report good news.
The press release today says there is one more filing, coming soon, before PREFERRED shares start paying dividends again, and before Prf. shares can be called. Did conference call address calling of the PRD-D shares or resuming payment of dividends?
As previously disclosed in our SEC filings, we did not timely file with the SEC our Form 10-K for the fiscal year ended December 31, 2012 or our Form 10-Q for the fiscal quarter ended March 31, 2013. We have now filed both of these reports with the SEC, and are planning to file with the SEC within the next several days, pursuant to an amendment to a Form 8-K we filed in April 2013, certain pro forma financial information regarding our sale in April 2013 of Eagle Ford Hunter, Inc. to Penn Virginia Oil & Gas Corporation. We could not file this pro forma financial information until such time as our 2012 Form 10-K and first quarter 2013 Form 10-Q were filed with the SEC.
The late filings of our Form 10-K and Form 10-Q periodic reports constituted a “default” under our Senior Notes indenture, which resulted in the unavailability of certain exceptions to restrictive covenants contained therein, including in respect of our ability to make certain restricted payments, including the payment of dividends on our preferred stock. As a result, we were unable to pay dividends on our Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock for the months of April, May and June 2013. As of July 3, 2013, we had a total of $8.9 million of preferred dividends in arrears. We expect to resume dividend payments on our preferred stock, including the payment of the amounts in arrears, as soon as practicable following the filing of the Form 8-K amendment referred to in the preceding paragraph, subject to remaining in compliance with our debt instruments.
The wt terms are exceedingly complex, and the prospectus does little to clear the air. Being "cashless" warrants, it is not easy to figure the warrant ratio, and you'll always take risk exercising them since they exercise at the daily closing price, which could be many hours from the price at the time you submit the wts. For example, if you submit just before today's close, your exercise ratio will depend on tomorrow's close. Not many people want to take that kind of risk with a high beta stock.