I have taken the chicken sh++T approach and bought the OKE bonds with 11.5% yields..Give you guys all the ups.
Guys you have to remember, the current deal leaves 4% to the common regardless of what happens with the DIP...If the DIp equitizes, the common still gets 4%, so the bonds can come down while the stock stays the same. If the DIP equitizes the warrants are for sure completely worthless. But that is the current dynamic. We will know in 10 days.
George, if you do a cash flow analysis and assume the $35 strip...they are bankrupt in 18 months, so $4 is good..I don't know what Rowling is thinking, does he buy this and feed it till it turns? Gotta remember in a change of control he has to deal with the bondholders, who have the right to put him the 900 million. So its a bit complex,,, on the other hand he sees something...nobody throws away millions...like this...
How the "step down" works is a negotiation. Trading like an 80/20 split. Secured vs unsecured.
Only 375 today,, so its curious. He's bought 750 past 3 days, not much longer he'll be at his max of 20%.
A tender at $4 would be more than welcome.
Banks will allow them to use only 200mm of the cash. plus expect another big writedown at year end, they have already stated that their puds would reduce by at least 19%. Average price recv'd in Q3 was $43, 72 with hedges. Current pricing doesn't work at all. So why risk all the holdout risk and expense. Time to file it.
Just got back in at 23.25. I liked it at 30, but was clearly not done going down...we'll see at this level. One of the few that actually cover their cap-ex
Its long over, even the shouting. Bonds are at 4c even the second lien is at 20c.
Bonds have a yield to maturity now of 63%, my cost is around 35c. The hedge worked almost perfectly. but from here I am naked. So the question is with WTI at 28, do I sell the bonds and breakeven or see if this thing makes it. I see equitization by the June coupon or something to reduce the int exp.
covered my remaining tiny short today at 1.35..stock is worthless...bonds are now 25c and may be worthless...tax losses are worth 43%..sad
Yes, they can file a pre-pack without being out of cash, but will be down the road. Basically hopelessly insolvent. Unlike Swift which is now begging for oxygen cause they ignored the obvious, companies can protect the liquidity they have or like Texaco years ago file to stave off a take over or lawsuit. The Judge still has to approve the re-org plan and if there's a reasonable chance of some recovery or if there remains shareholder equity a Judge will approve an equity committee. So Sandridge can file and maybe there will be a valuation fight. The secured paper will contiue to get paid generally or at least get whats known as adequate protection payments for the use of their collateral. Second liens may or may not continue to get paid but usually their claim continues to accrue.
Left me a freakin 100 share short..whoopie. I suspect odds of next announcement now very negative versus positive if that wasn't already obvious.
Yes, Why I only own the bonds..Getting paid to wait, huge yield and if Rowling tenders he has to refi the debt same time. Could be a homerun. If oil and Nat gas stay here..he'll eventually own this at $1
A tender would be welcome for the rest. $4 sound good?
Lefty he has done nothing but add, NEVER sold a share. Started at over $10/sh. As I said he's welcome to buy this at anyprice. If he waits long enough he'll be able to tender at $1. At which point the bondholders will put him the debt. at 101, which I so look forward to.