Yes, I do not know who is buying the bonds at 42% of par. I had thought along with a lot of people here that it was TC buying.
Maybe some people have run the numbers and figure they will get a decent chunk of the company post reorg. I have no clue anymore.
At 18% of par for the 2019 six months ago it was a no-brainer. Someone who bought then is already only in it at 11.375% since they just got a 6.25% payment May 4. This November they will only have 5.125% at risk, with the potential for a 2000% return from that point if TC makes it to 2019.
See why I like the bonds?
I meant if the notes go down and the stock still has value, I would recommend an exchange. 40s is too high for the 2018 or 2019 to be buying in. I liked them at lot better in the teens.
Really the common stock isn't worth much. You get the impression from the CC that they are all out of ideas and just pinning things on hope. Debt for equity or even complete default and bankruptcy is the outcome here if metal does not improve significantly (and I mean stuff like $3 copper, $10 moly).
Well, one negative right now is I don't think you can raise $600M in preferred shares because of the much lower price of copper than when I posted. I was figuring they would have EBITA of $160M when really they are only making about $100M now.
You are going to have to give a lot more meat to preferred holders with today's metal prices. This kind of means common stock gets nothing. It would be nice though to offer the preferred shares to common holders in a rights offering.
I don't know why someone gave you a thumbs down. I mentioned this same idea about a year ago? Here it is:
"lightdoesnotage • Jan 22, 2015 11:21 AM
Time to get rid of the debt. Here is how to do it.
Offer $600M of preferred shares. These shares would pay a dividend equal to 25% of EBITA. Give existing shareholders rights to buy into this offering.
Debt fully retiring using the $600M plus cash on hand. Small revolver could be opened for operating costs...interest rate would be super low with no debt.
So then EBITA is $160M, debt payment zero, preferred shareholders get a $40M dividend payment (7%!) and existing shareholders get a smaller 2% dividend.
Greedy bondholders get nothing after 2017"
I like gold mining. Pretty much that. It was the reason I bought into Claude. I am a sucker for the possibility of owning a good gold mine.
And I enjoy the banter when it does not get too political. I don't even know who I am going to vote for this year. I can't vote Hillary and I can't vote Trump.
Swap your shares for debt the next time you can get $0.50 USD and the debt is 14% of par (or lower). These two events may not coincide.
Still a heck of a gamble, but at least you will not have to worry as much about a massive dilution. The unsecured notes *might* get something at the end of this mess.
What a train wreck. To think I have been messing with this company since 2012!
Well that sounds depressing. It sounds like the common stock has zero value and the unsecured bonds very little value.
As they edge down in cash, I might try to unload a few of my 2019 if they are in the mid 40s. I don't want to get stuck with stock in TC since Perron will probably stay on running THAT into the ground too.
The 2019 has traded today in pretty good volume (500k for 42 and 50k for 39) which is higher than I thought it would be. Not much trade on the 2018 although it has a bit higher price.
Their plan is hope. Hope for some angel investment bank, or hope for metal pricing to save them.
Their short term plan is to hoard as much cash as possible to make sure they can make payroll as long as possible, in addition to making interest payments on the notes. I would not be greatly surprised to see some bonuses paid out this year due to the great safety record.
I now expect the Nov 2016 note payment to be made, along with the May 2017 payment. A bankruptcy or re-org filing some time in late 2017, possibly missing the Nov 2017 payment on the 2019.
I don't have time to mess with TC today...packing up for our trip across the country to sail in the Florida Keys. Going to do Alaska next year (or the year after if we really like the Keys).
That is kind of grasping at short straws, suggesting manipulated accounting. They have just gotten big, and big ships turn slow.
The above is the best post probably in years. This is likely exactly how things are playing out. Management just hired the consultants so they could not be accused of being complacent. They have no real plan except hope on metal. They do plan to collect paychecks for as long as possible, which means you don't buy debt, you hoard cash for payroll.
I thought Gilead was all doom and gloom because Merck was stealing all their business. $50m is like what Gilead makes in Usbeckibeckistanstan.
You can feel their excitement with 1456 and almost more so with 1169. The CAR T-cell research is just bonus gravy but has the potential to be the real money maker (not just little billions of dollars)
I bought another 3000 shares just now at $3.40 after reading the CC. This is just too cheap for all of the news that is coming out later this year. It really is too cheap at $10 a share, but at cash level it is just stupid cheap.
I would believe #3 back when copper was $3.50 but now I am not sure it is so easy to just go to a bank and refinance when your credit rating is 390
They have to toss the board a bone so it can tell shareholders how hard it worked to maximize their value. If they offer $0.50 a share, it could look bad.
Actually reading some of the other threads I have noted at least four of you with this exact same theory...maybe not so way out there.
A buck a share would be $225m plus if they spent about $200m buying $500m of debt, they then get TC for around $600m out of pocket debt free.
$600m for a $1.5b mine in a safe environment, moly stuff is freebie.
This is so unlikely but sometimes you never know...
Some entity is going to make a lowball offer on TC later this year. That entity has been buying debt instead of TC. Obviously when things get dire toward 2017, shareholders will be willing to take some pittance for fear of getting nothing. So by then this entity owns a quarter, third, half of the outstanding debt, offers TC a buck a share, and ends up sitting very pretty.
This is kind of how I would do it if I were a vulture with some big bucks.