RE:RE:RE:Taking it in the ChinI'll try and simplify what has been happening for you on multiple using a simple ebitda multiple since you are putting some work into it. Mosts analysts use ev/ebitda but this is for demonstration purpose.
if a company gets a 7.5 x ebitda multiple and has no debt, that multiple is strictly on ebitda
in the case of cxr it would look like this taking debt into the equation.
when the debt target was 6.4 the equity portion of the muliple would be 1.1
6.4+1.1= 7.5
when they added more debt with notes it looks like this.
7+.5=7.5
so the multiple stays static, the debt takes a bigger portion of the multiple which all comes out of the equity value.
Equity portion of muliple is now .5 compared to 1.1 which is roughly 55% less after debt was added.
its a little more complicated than that, but may help you understand a little better.
ryehigh2014 wrote: You realize the 350MM issuance was positive right? The company had a HUGE liquidity issue. Note liquidity does not equal insolvency but it can lead to it very very quickly.
The company is NOT insolvent and generates enough FCF. The company was illiquid before the issue when comparing against current liabilities.
I agree with you on the cable rate (GBPUSD). That will weigh on earnings. Although I modeled it at 1.21 and numbers looked fine.