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SPDR S&P 500 ETF Message Board

colbus50 7 posts  |  Last Activity: Dec 8, 2014 4:53 PM Member since: Jan 24, 2009
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  • same. Studied most recent 10Q. Most concerning changes are granting valid perfected security interest in assets but no mention of which assets and to who, changed covenant to max secured debt to 3.5x ebitda and changed covenant to 3.5x interest expense to ebitda. The interest coverage at 3.5x is barely achieved right now even a small ebitda miss could place in default also sometimes banks included lease obligation as part of coverage if that is done than CLF does not cover.. 3.5x secured debt equates to about $700k of borrowing. The existing unused credit facility of 1.3million at best than only 700k could be used. Also receivables went down by 100k and inventory up by 100k never a good sign. Total a/r and inventory equals 700k with an at best advance rate of 70% means only 500k could be drawn against this secured position, Once Casa got involved goals is to get the company private, that will make the most money for them. Perhaps will buy out shares at 3 to 5 and throw some money at the unsecured creditors. A buyer has not step up even at this price because they know it is going to get cheaper. Good luck whatever why you play this. For me I stay away there are other good stocks that money can be made.

  • Reply to

    How BK would unfold

    by colbus50 Dec 4, 2014 5:22 PM
    colbus50 colbus50 Dec 5, 2014 8:53 PM Flag

    Surf, thanks for the thoughtful reply. I will study the Q3 report some more a post a reply. You are correct as you well know on the bonds, I never dealt in unsecured bonds. I am very familiar with bank loans and credit facilities. When banks start to tighten covenants and perfect liens they are closing in. I would feel different about this situation if Casa was not involved, these kinds of firms rarely make investments and lose. Financing footnotes lack key details which makes me suspicious. Cash on hand does not count toward achieving the loan covenant,nor does borrowing capacity even if your house has a million dollars in equity but if debt cannot be serviced than bank can take action. $200mil a qtr seems high so annualized 800mill, interest is running 200mill a year so they just makes it pass 3.5x. Its not clear how covenant is calculated but usually a rolling actual annual total. I had traded CLF early in the year by selling puts, lost money, charts never seem to show its out of the woods, I keep watching but the picture has gotten darker after Casa got involved. Good luck,

  • Reply to

    How BK would unfold

    by colbus50 Dec 4, 2014 5:22 PM
    colbus50 colbus50 Dec 5, 2014 4:46 PM Flag

    no I do not work for min wage I work for free. Its great being with my grandchildren

  • Reply to

    How BK would unfold

    by colbus50 Dec 4, 2014 5:22 PM
    colbus50 colbus50 Dec 5, 2014 4:28 PM Flag

    Your correct I drive a bus for my daughter's daycare. previously life was a CFO for twenty years at a publicly traded company.

  • Reply to

    How BK would unfold

    by colbus50 Dec 4, 2014 5:22 PM
    colbus50 colbus50 Dec 5, 2014 4:08 PM Flag

    when Dividend cut than BK will be next, its not far away now

  • violate loan covenant related to interest coverage of 3.5x, interest expense run rate is 200mil a year, debt and lease obligations in 2015 are 100mill, recent loan changes allowed somebody to perfected lien on assets No need to go to court assets are already owned. other loan restricts have been put in place. Also be careful a major partner/customer does not make their capital contributions to keep operations running. calling this debt unsecured is false.

  • help offset their loan loss. CASA will own the company. Does not matter how much your house is worth if you cannot pay the debt and nobody wants your assets. This is what CASA wanted all along. This is following a pattern very similiar to another Cleveland company National City Bank.

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