Hey you misconstrue what I say..I own a decent amount of the debt and therefore want this to work...After 35 years in corporate restructuring I gotta say, this one looks like all the others. I hear you on Fasken and agree, I also don't see them making some of the other covenants so lets see how it plays out, maybe I'm too negative and that would be a good thing. What I do hear from bankers is that lines are being cut left and right, and no I have no clue yet on SFY.
Stoker,, here's what your missing. When the borrowing base was calculated 10/17/14 WTI was $82 today its 45.57. The borrowing base gets reassessed in April. At current price's I calculate availability on the reduced base will only be 28 million and with no cash, that's a big problem. Bonds are telling us that because they have such high yields. I'm not the only credit dude in the Country. So what's gonna happen is the following. First lien debt stays in place with the lowered base , however my guess is SFY is drawing down the line knowing its not gonna be around. Than they will do a high yield maybe 12% second lien deal for about 300 million. They will need a waiver first from the first lien, which they will get. The terms of the first lien require quarterly repayments of draws over the borrowing base, so hence the second lien deal. The second lien will come due before the 2017 bonds so they can force a sale of the Company. The current bonds outstanding are trading down because of the priming lien that's coming. So my guess is there will be 5-600 million ahead of the current bonds and than another 800mill of bonds so 1.4 billion of value ahead of the common. We will see a huge writedown in the next earnings release as well, likely enough to wipe out common equity. So its now a hail mary on the common, but Terry won't file it until the 2nds force it, which will be sometime in 2016, unless prices rise by than. We need about a 50% rise in WTI. So if you buy the current debt at 37c, you get the company at a valuation of under a billion, which has little risk, but the common well I simply can't get there , nor do I think I'm paid for the risk anymore. Time will tell, but we won't have more to wait than beyond the 2/27/15 earnings release and than of course next shoe is the April credit test. Chow. I hope your right, but I really think its nothing more than a hope and a prayer at this point.
SD, I don't disagree with anything you write here except buying SFY at 2.12 the common is in my opinion a mistake at the moment. Why do that, when you can buy the 2017 Bond at a 61% yield to maturity??? No reason at all actually. 61% 971,000 face traded there yesterday. Bonds need to triple in 2 years and for some reason Sfy doesn't make it and files next year,, guess who gets the equity. I don't like the common trade in the least versus owning the debt at today's prices.
No..chance..bonds are going lower day after day and they need to get paid first..some have traded nto the 20's,,yes 80% off..so I have little hope for the common at the moment..Little to none..
Just the way it looks since we got no lift after the S & P stable announcement. If the line is cut in April they will need cash to fill the cap-ex plan they just announced. I had assumed a draw of the line anyway so as long as it's over and above the 170 or so..should be O.K, either way without higher prices by year end, gonna be trouble. I figure they can survive until March 2016
Rometti is probably gone, not on the call thankfully. But how about growing the company, instead we have 50 billion of debt and ALL their sharebuybacks have been bad purchases...Another year of this and we will be sub 100 or worse. MHO
I will say its truly amazing how they upgrade at the top and downgrade at the bottom, they get paid for this. Most of the oil analysts have capitulated already. Raymond James last week was a classic
we should see a pop in the debt Tuesday.
So I guess it was you and I, bought at 36 1/2-and 37 and change...40 with accrued, so I'm thinking at that price the whole company worth only 500mm. Seems too low even if they default restructure etc. I'm going to assume the cap-ex they announced is drawn off the line whether it be a Dip or current. So maybe its 10 down now and 60-70 up, kind of like that..covered 2/3 of my stock short as well. $2 left with unknown up
Chuck, we will know tomorrow, all I know is I don't like coincidences. As a bondholder, I wish the common the best, I'm not in this one as a loan to own situation.
Any chance Vincent is leaving 1 day before the 30 day grace period ends, so he can say he was never with a bankrupt company. We will know tomorrow.
No, buy the cheapest debt piece out there at 35c...25% current yield and you are ahead of the common if it restructures, if it doesn't file well 25% plus upside to par...your return is in the 30's....Better no?
Short interest 15 million shares or 36% of the float...Shorts have this dead on perfect...And the bonds told the story....instead people fought it, from here who knows..$2 its ajump ball
Yes CCC, why I hedged out with the short down to the mid 30's on the paper. The odds of the next event being negative is very high relative to positive. I have a long position in the what is now out of the money $5 calls to limit loss against a buyout...But as another blogger wrote the language in this press release was negative..a working with vendors signals a problem.
I hope they have time Chuck...for all constituents of this company.