It's a Lehman-like lose lose proposition: Either Ch 11 brings the Units to $.02 or a Kirkland & $ellis Blue Plate, dilutive debt for equity conversion special.
Look at the Halcon & other Kirkland advised deals. Debt was exchanged/raised &/restruct to pay down revolvers and give the cos more breathing room. Snr Bondholders got increased coup for taking a principal clip and/or extending maturities.
Ron, I'll be on the Bronx Street corner today with my daily 3 Card Monte game, which has better odds than Line/Lnco units going to Lehman prices($.05) in days. Coffee, Kibble & Kibitz will be served.
On a serious note: Check this out from Hercules 11 filing ....shades of future for Linn & your Snr 8% Notes?
"As announced on July 13, the pre-packaged plan provides a substantial deleveraging transaction pursuant to which more than $1.2 billion of the Company's outstanding senior notes would be converted to 96.9% of new common equity, and $450 million in new debt financing would be provided by those holders of the senior notes who wish to participate on a pro rata basis (with the full amount backstopped by certain members of the steering group of noteholders), which would fully fund the remaining construction cost of the Hercules Highlander and provide additional liquidity to fund the Company's operations."
No, but given this volatile, NO Uptick rule run amuck market, anything to thwart the bear raids would be nice for long term, income oriented investors in this LOW rate environment.
I was on target, fund NOT for the faint of heart. Glad I dumped. Down nearly another 5% after a bruising '15. Hope it comes "roaring back" for those still on board....
Makes no sense, OTOH, there's been a bear raid on BDCs with CLOs for months. Sans a BIG buyback, makes you think a monthly divi policy isn't a bad call. It may keep bear raiding hedgies & Divi capture pirates away knowing there's a healthy divi to be paid EVERY month vs, pounding it for 3 months.
Ron, as if Line Units aren't precarious enough, I'd rather play 3 card Monty on the NYC Street corner than own highly LEVERAGED closed end funds. As seen in '08, If the Auction rate securities that fund their LEVERAGED divis can't be sold, WATCH OUT BELOW! If they cut the divis, people dump em like there's no tomorrow. Can be down your divi (-10+%) in a day before you come in from the links and know what hit you. Without new buyers, it's a slippery slope. They are precarious weapons of mass financial destruction.
Ron, you've been eloquently carping about the so-called "senior" bond prices reflecting imminent doomsday since the $.40s. The later maturities & higher yield have provided lil solace. More surprising is the unit price(s) not in Lehman $.05 territory.
No Pot of gold in this shredded Xmas stocking. I'm amazed the lump o coal units aren't trading at Lehman '09 price$. Credit default swaps under your tree....