Your right....The bonds were in the 86-87 range around the 2nd week of October....At 96 today per Bloomberg....Looking good.
Now wait just a second. Even if DXM was to meet its forecast that it provided for its lenders leading up to the latest bankruptcy, DXM would still have close to 2 BILLION in debt by the time it matures again. Well before that time, DXM would have already approached those debt holders hoping to renew the debt with maturities extended. NO, THEY CAN ALSO SELL ASSETS OR ISSUE NEW BONDS.
So, around middle of 2015, DXM would likely be sitting on close to 2.5 BILLION of debt with cash flow still shrinking. NUMBERS TO BACK THIS UP PLEASE. ALSO, INTEREST EXPENSE WILL BE LOWER DUE TO THE REDUCTION OF L/T DEBT
Another BK NOT in the cards??? NO
Are you kidding me?!?! NO
Already DXM looks to be in trouble coming close to meeting those forecasts and they just emerged from BK. Any continued weakness on the front end of those projections will make it more difficult to achieve. TRUE BUT THIS DOES NOT AUTOMATICALLY TRANSLATE INTO ANOTHER BANKRUPTCY,
And, to your point, bonds ARE safer which is why they are still holding up pretty well. Equity is dropping in value because it is becoming less safe each passing month. IF BK WAS A CERTAINTY, BOTH THE BONDS AND THE STOCK WOULD BE FALLING. ESPECIALLY SINCE 1) THE BONDHOLDERS WOULD RECEIVE EQUITY WHICH IS WORTHLESS ACCORDING TO YOU AND 2) THE UNCERTAINTY REGARDING HOW A BK WOULD VET OUT FOR BONDHOLDERS AS A WHOLE.
Holding bonds is ALWAYS safer than owning the equity.
Also, they already have decent cashflow, is paying down debt, which is lowering interest expense which will lower capital requirements going forward..
Another bk is NOT in the cards
Considering they have been as low as 27 and as high as 72 this year, 65 is not too bad....
It certainly does not correlate with the stock price...