GREY:STPJF - Post by User
Comment by
PeakOilBoyon Jan 23, 2013 3:22pm
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Post# 20879607
RE: RE: RE: Debs being dumped
RE: RE: RE: Debs being dumped All good points. I should have been more clear, i thought bakken was talking about the new issued 8.75% bonds. Some trading at the break on a new issue is common and no big deal. a point one way or another is no big deal. it's a small issue, illiquid small cap name. it's going to move around a point to trade. This bond is secured and covered on asset value. It is asinine to think/imply a company would issue bonds and then 4 days later something would go terribly wrong and or not be reported. To type on a board that a bond moved a point and the sky is falling is just no value add BS. The debt is above the equity in the capital structure. If the sky was falling the 500 million market cap would probably go to less than 100 if the credit was really having issues.
The convertible debt will trade on spread until close to the money (2.15 as you said mjh). JP Morgan High Yield Energy Index is at 5.76% today. trading less than 100 bps wide of that seems reasonable to me (if not a screaming buy). Certainly not distressed. It's telling that the unsecured bond trades inside the secured bond. Huge equity upside, but again, no signs of distress.
But what do i know, preach on bakken.