The answer is not without approval of the Bank debt. That restriction is a covenant in the JP Morgan loan. The other covenant to watch for is the interest coverage. Its 2.75-1. I'm figuring they were somewhat over 4x's before the collapse in oil, we may need a waiver.
yields yes 40% for the sub debt and the senior debt is at 50-60c on the dollar...Combine the 2 and the common is toast...no other way to read it...SOOOOOOOOOO for all you newbies out there who want to be in this buy the debt, it will get paid 100c before the common gets a dime. And thats a fact Jack
This is why historically this time of the year has been called silly season. That being said think about who the buyers are. Forget about small retail or retail in general, they can't move markets in bonds. So that leaves the distressed funds. The distressed community only buyers from the big mutuals. Its year end so they are not gonna take huge event or headline risk and mess up a decent year. The pickings have been lush in parts of Puerto Rico and of course Detroit. There's another issue with the distressed guys. There's been so little distressed that many of the old funds have morphed into something else or gone back overseas buying boat loads of defaulted European bank loans. Also, last time the oil patch was this distressed was 1998, so either current funds didn't exist then Or if they did everyone has forgotten how to value E & P companies. So they now have to rehash what the heck a PV 10 means and how much mineral rights and land trade for. This all takes time, some will hire industry guys to help them. That all being said you can see institutional buying starting in some of the equities since they have oil and gas people on staff and in some of the much better and obvious credits. Those in the 80's and 90's or par stuff that was 110. The other buyers would be the capital structure arb guys and they won't play until Jan. Patience
And now that its opened Thanks for the quick 13% overnight..ya see..instead of throwing stones you can learn a little.
Laugh all you want...If you read my post I DID short the stock at the close, because Stroke, The bonds will get 100c before you guys get a dime, yep thats the way it works. That being said once you understand that part, you will know I want the common to have value, means I've done well. I shorted the stock on the close with a minute on the game clock, thinking worst case they get taken out and my bonds are par up 60% and I lose a little on the stock or I cover today when no buyout occurs and I continue to clip my 30%...I prefer Remy XO by the way.
And I will admit..I did short the SFY stock right at the close, thinking its running only cause equity betting on a Talisman style buy out over the weekend. I will cover, into the decline this morning assuming no buyout. Was easy arb really, worst case was I don't make as much. So much of the trading now is black box that moves are exaggerated in both directions.
Equity usually the last to know...I remember in 2000 when the bubble burst in tech. Blodgett et al recommending some beat up fiber companies, the day before bondholders filed the companies. Was hilarious. 1 day. They simply don't understand that fiduciary responsibilty shifts to the debt at a point. Hey on Swift or Energy XX1 or any of the others...I'm happy to take par and let them have the rest....
Yeah was the 21's. I like in the free fall scenarios to buy lowest dollar possible initially. In a chapter filing everything pari passu trades the same dollar plus or minus accrued. So if oil had continued down and these guys had their borrowing based reassessed and were forced to file I have a little protection. Anyway, I than bought the 19's for about the same price as you if I recall. Will be interesting to see this all play out..
Not sure how your math works at all...There's a change of control poison put in the paper...if an offer or take over is agreed on they the bondholders will put the bonds to the acquier at 100c. Not a chance in the world the stock is worth $25
Bought thoseEXXI also at 51c..I like them as well. Bought Berry Pete paper also, the Linn sub...low 70's,, better credit than the others...
I agree I own the 2017 between 56-60.5. They are going into the 70's in the new year at least. The 2020 are good too..avoid the 2022 for now, not sure there's a poison put like the other 2.
Stock has no value unless bonds are par....
facetious remark actually...AT 56 I have short term near zero risk...I have a stock that trades like water to hedge f I choose...I'm happy to own the company if they default..which is way way down the road. Too much liquidity in the bank debt... Worst case they do a distressed exchange at higher levels. At worst its an easy trade.
Bought the bonds today yielding 35%, not sure who to thank...
Yes exactly, HPQ lost 70% of its value first before it got new management. So with that in mind I'll buy IBM at $65, where it was in the 90's after management couldn't figure out which way was up. She needs to go and quickly, buying your own stock is suicide when you have no new products and are a tech dino. She has missed social, she has missed mobile, she has missed internet, she has missed cloud she has missed everything. No vision, management is too old. Can't have 55 year olds running the business need the Youth. I've been negative on this for years.
Really...50 billion in debt and little cash and declining business...huh..Romatti is like the Jets, Titans, Jags all rolled into one..