Debenture Subordination 1) I have the prospectus for the Preferred Shares of Yellow A, B, C, and D, and the prospectus for the Convertible Debenture A. I am having problems locating a complete prospectus for any of the Medium Term Notes. Can someone point me to one?
2) Can someone post the exact language in these agreements that make the Convertible Debentures subordinate to the Medium Term Notes? The only language I can find is in the "ratings" section of one of their documents, which says indirectly that the Debentures have lower S&P rating than MTNs "due to their subordination". But I don't find any language that specifically makes them subordinate.
What is quite strange is that the Debenture A prospectus says it is subordinate to "senior indebtedness" and secured debt. But nowhere is the medium term note clearly defined as "senior indebtedness". In the few documents related to MTNs I could find, they are referred to as "subordinate debt". The quarterly earnings releases aren't much better. Those talk about the Convertibles being subordinate to "senior debt" but then never cleanly define the MTNs as "senior debt"
3) To the extent that MTNs recover full par before the Convertibles recover even a dime, and to the extent the MTNs are trading below 50% of par, would it be a fair bet to say that in a CCAA action and restructuring that the Convertible Debentures will go to zero?
What's really strange here is that the preferred C and D now trade at about 2.5% of par, whereas the convertible debentures are still hanging out at around 14% of par. A few interest payments might account for some of that price difference, but it looks like preferreds are oversold and debentures don't reflect the risk of wipe out.