RE:RE:RE:RE:RE:RE:RE:RE:Moody's acknowledgement of improving fundamentalsClarification.
I likend the Junk Bond (JB) to a regular Mortgage by talking about Principal.
It is similar, when you really think about it. In a JB the Principal (or face value of the JB) is paid off, at any point with a partial, or full payment, that the company feels confortable with.. Except that there is NO direct Principal repayments with a JB, where the JB holder has blended principal, or pre-payment advantages. So the onus is on the JB Borrower to pay the principal of the JB at anytime or times at it's advantage. What I was refering to as Principal, works similar to a Convectional Mortgage, where the Borrower (Bombardier) is at a point of time in the JB, where Interest Payments are low enough to the collective JB LTD, where the Interest is minimal or small compared to the FCF they getting year in year out.
Usually on a Conventional Mortgage where
Principal is heavier than Interest
is about the half way point of an Amortization period of say 20 to 25 years. So in this half way point here, the principal is heavier than Interest (exponentially) So the Conventional Mortgage is designed that way to combine P & I. Where as a bond is left to the Borrower, to either pay down, or kick the can down the street, by renewing it for full face value.
In our case, where that Influction point occurs, in the JB, IMO is, is at around where the FCF/EBITDA is around $1.5B and the LTD is around $3.5B. IMHO. That could be in mid 2024 for us. That's why everybody says we're ahead of the Guidence, because it going to be achieved earlier than the 2025 Guidence time given. Many may have diferent Influction points, but that's always debatable. I'm just using that point from the Guidlines set by Bombardier management, where they know the company's financials well, and they estimated the range of where the LTD is very manageable.
BBDB859 wrote: I like his last statement on Debt he used the word (exponential). That's essentially how it is/works. Our LTD re-payment will reach a point to where the Interest payment and the principal payment are at a point where Principal is heavier than interest. That point is coming in the end of 2023. That's my point (pun intended).
flamingogold wrote: Add to your list post covid created more billionaires as did post fiancial crises... more billionaires who will want their own private jet. I would if I was that rich lol.
Finbarr wrote: what I like about the current situation:
- increasing deliveries
- increasing margins
- few R&D sinkholes
- decreasing debt
- top of the line product vs other competitors who are playing catch uo (with the R&D budgets to supprt the catch up)
- virgin market potential in the military
if there is one downside it would be the biz jet mania through covid may be over. That said, the market will not fall over time, and as noted above the Bomber has great if not superior products.
all of the above plays into a virtous circle of cash... more sales, better margins, less debt = spirlalling amounts of cash at non-linear rates (exponential).