what the total debt is on the 10 percent that is still oustanding before this offer? this would be a 2.7 million dollar savings per year so I applaud them for doing this.
to be clear, there is a difference between buying preferred vs. bonds. the principal for preferred (cost of shares) never actually has to be paid back. but in bonds it must. so buying 25% yield preferred would take 4 years to get their money back and every year therafter would be 25% savings.
Buying bonds at 10% yield would be 10% savings a year but the entire principal could be written off as this would have to be paid back. Reducing debt when it is cheaper is always a good idea and if bonds are trading at 60-70 cents they really would be crazy not to. I would even be willing to take a hit on my preferred divys for a year for them to do that
I cant find a current quote but i assume its taking a hit. Ian would be crazy not to buy the bonds. Remember the preferred isnt as worth it because it saves 9 percent but require capital buy back which they wouldnt have to do otherwise. But the notes they have to pay back so they would be ideal. I fear though that there may be something we dont know
well it would make much more sense to buy back bonds, I don't know what the discount rate is for the bond, USY2718TAA61 but bonds eventually have to be repaid and if they are trading at 60% of value, the company can make out like bandits, saving the 10 percent ANNUAL yield and 40 percent of the payback...essentially a 100% return on investment
doesn't it seem incredibly prudent for the management to maintain divy and just use proceeds from ship sale to buy back bonds or preferred shares to avoid paying divy on those? it seems that with these rock bottom prices they would save a lot of money and deleverage so any prolonged problem could easily be managed.
no not sure i think that is just the target date, but I don't know if they have to be purchased. I doubt it cuz then they would be bonds.
The GSL B preferred shares that are trading for 12.5 have par value of over 20. What happens in 2019 when these have maturity? is the company required to pay the par value or they can continue to pay the dividend? what usually happens with these preferred. Also what is the call price if they wanted to buy this out? 10% premium to par? Also what is likelihood of getting shares in bankruptcy ? are the bonds held by the company more than value and preferred gets little to nothing? thank you in advance. I made myfirst purchase of these on friday with 17% divy!