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Prospect Capital Corporation Message Board

donf22 9 posts  |  Last Activity: Dec 9, 2014 4:36 PM Member since: Jul 27, 2011
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  • Several law firms are trying to bring class action lawsuits against ARCP. Any thoughts on how this might go would be appreciated. In addition to ARCP, any form with a big drop in value is being pursued this way, SDRL and Petrobras specifically. My concern is the impact on continuing shareholders like myself. Will the costs mean dividends have to be cut? Would a ruling in favor of exited stockholders mean some assets of ARCP would have to be sold impacting continuing shareholders? Any thoughts are welcome.

  • donf22 donf22 Nov 26, 2014 9:57 PM Flag

    This is a really bizarre juxtaposition. SDRL issues are the huge drop in oil prices which make their oil drilling customers less willing to drill. This combines with the large number of rigs under construction that SDRL has to pay for with or without clients to lease them. Fly is leasing to airlines which are financially the healthiest they have been in 20 plus years and actually benefit from the drop in oil prices.. FLY buys only existing planes which it finances and generally leases at time of purchase. Fly has no planes under construction and thus no obligations to make forward payments.

  • There is a perception that AYR is much larger than Fly. The gap in terms of number of aircraft has narrowed with substantial sales by AYR to lower their average age. Fly now has 121 aircraft with an average age of 8.2 years and lease term of 4.9 years. AYR has 19 more aircraft = 140 with and average age of 8.6 years and lease term of 5.0 years. Size difference is in book value Fly $3.477 billion / 121 = average BV of $28.7 million. AYR $5,233/140 = $37.3 million per aircraft. Must be in size mix. Note - when reading AYR's quarterlys, the 2014 numbers are on the right. If you read the leftmost column you are reading 2013 numbers. An odd convention.

  • Took a look at AYR and FLY return on capital. Used the measure of Adjusted Earnings before Depreciation (so interest was paid) versus Book Value. AYR quarter annualized 29.6%. AYR 9 Mos annualized 31.1%. FLY quarter annualized 38.1% and 9 Mos annualized 34.7%. FLY better returns on equity. Selling, G&A - AYR for quarter 7.78% of revenue and for 9 mos 7.21%. FLY for quarter 9.40% and for 9 months 10.83%. Fly more expensive by 1.62% for quarter and 3.62% for 9 months. For the quarter the gap narrowed as AYR's percentage went up and FLY's went down. Even with the expense advantage AYR's return on equity was less than FLY. FLY dividend yield on 19-Nov-14 stock price is 7.60% vs AYR 4.32%. Fly better yield by 3.28% or an increase in yield of 76%. When you look at the companies financials and results, they are pretty close with FLY being excessively punished for an Ireland address, external aircraft management, and what is portrayed as annoying self serving management .

  • Not a single asset was destroyed. Not a single lease was terminated. The lawyers will try for a settlement. If it requires that assets be sold to make payments, they will have damaged all existing shareholders to benefit the selling shareholders. There should be a class action lawsuit against them.

  • Reverse splits allocate the same value of the company over a smaller number of shares. If your holding represents 1.0% of the value of a company before a reverse split, you still own 1.0% after. In NRZ's case going from a below $10 stock to above makes it eligible to be held in a large number of accounts that do not hold stocks below $10.00 in value. This could increase the number of buyers and the stock price.

  • The transfer from KMR to KMI means that holders will receive a K-1 with some UBTI - Unrelated Business Taxable Income. This could be a positive or a negative number. If held in an IRA there are tough tax payments required if total UBTI in the account exceeds $1,000 per year. Could somebody please look at their K-1 for KMI for last year and post the UBTI per share? This can be found on the front page of the K-1, item 20 at the right hand side, with the letter V as in Victor in the small box and a number to the right. Divide this dollar amount by your number of shares(units) and you have the UBTI per unit. Much thanks.

  • The transfer from KMR to KMI means that holders will receive a K-1 with some UBTI - Unrelated Business Taxable Income. This could be a positive or a negative number. If held in an IRA there are tough tax payments required if total UBTI in the account exceeds $1,000 per year. Could somebody please look at their K-1 for KMI for last year and post the UBTI per share? This can be found on the front page of the K-1, item 20 at the right hand side, with the letter V as in Victor in the small box and a number to the right. Divide this dollar amount by your number of shares(units) and you have the UBTI per unit. Much thanks.

  • Reply to

    comments please on conversion

    by smulloy98 Jul 28, 2014 11:07 AM
    donf22 donf22 Jul 28, 2014 3:02 PM Flag

    This is not a new action. It is the unwind of bonds issued earlier with terms that resulted in this per share pricing with perhaps a premium to get the transaction done two years early. Hopefully this will be refinanced at low rates.

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