Distressed Debt Investing Website 09/08/10 Analyses of distressed investments often range from the relatively straightforward to the mind numbingly complex. For investments in companies with a simple capital structure, investors will focus on factors such as cash flows, collateral value and terms of the governing credit document. In larger, more complex companies, investors might have […]
May 17, 2010 Astellas agrees to acquire OSI Pharmaceuticals (OSIP) for $57.5 in a tender offer scheduled to close 6/4/2010. The OSIP 3% converts has an interesting take out matrix because there is an incremental share factor involved. Make whole language Conversion rate = base conversion rate + ((57.7 – base conversion price)/57.5 times incremental share factor) […]
HEARD ON THE STREET AUGUST 16, 2010, 4:45 P.M. ET Blackstone Might Rewire Dynegy’s Balance Sheet By LIAM DENNING It isn’t often a 62% premium offers reason for grumbling. Blackstone Group‘s takeover offer for Dynegy effectively gives it two-thirds of the company’s generation capacity plus cash for no money down. That is because NRG Energy […]
Distressed Debt Investing Website 08/09/10 One of the key determinants of recovery in a Chapter 11 bankruptcyor distressed debt situation are the specific guarantees embedded in an indentures of a corporate bond. Like a guarantee on a home purchase or rental agreement, XYZ party guarantees the liability of ABC person. In corporate finance, these guarantees are […]
Trade Summary Based on our analysis as detailed below, we believed there was a high likelihood that Ford would take some corporate action that would include a resumption of dividends or a call for redemption, or a tender offer. The trade was initiated with the possible three outcomes: I) The company would initiate the dividend […]
March 29, 2010 NPF 0.75% converts due 2/1/12 are trading at 88, which presents a great opportunity for capital appreciation because I believe that management wants to refinance the convertible soon. I spoke with management and they expressed interest in issuing either a high yield bond or a new convert so that they can clear […]
$250m (+37.5m) 144a sen cb pricing tonight from JPM/Citi Terms: 10yr, 1.5-2% up 37.5-42.5, put/call 3.6 yr (12/1/13), t/o & dvd prot. Concurrent $200m straight deal. UOP=debt repayment. Lennar is one of the largest homebuilders in the US. Stk has recouped losses from last 3 yrs. 5 yr CDS 260-270. We’ll be conservative and use […]
Distressed Debt Investing 04/13/10 When analyzing a distressed debt investment, it always helps to remember that the presiding judge on a case will be the final arbiter on a number of decisions that may sway the direction of a case and consequently, recovery and return to distressed debt investors. For example, today in Tribune’s bankruptcy, […]
Distressed Debt Investing Website 04/12/10 A pivotal aspect of distressed debt investingis the negotiations among opposing (read: warring) creditor factions. Senior creditors may want one thing, but subordinated bond holders want another. Sometimes people throw the “cram down” rule as a gauntlet in negotiations when in fact they may not even have the necessary stipulations […]
Distressed Debt Investing Website 04/07/10 Grant, a member of the Distressed Debt Investors Club, pens a piece on the advanced distressed debt concept of pre-petition debt reinstatement. Enjoy! Some companies currently experiencing financial distress raised large amounts of debt capital on significantly easier terms during the last decade’s “credit bubble” than they could obtain today. […]