Bank National on PSN
Looks like they are as much in the dark as everyone.
Target and rating under review.
As we indicated in our last three notes, we expected further negative news and while we correctly identified that risk, the magnitude of the writedown and the restatement is larger than thought likely. Our target and rating is Under Review until we can determine with reasonable confidence the state of PSN’s current and historic operations. Furthermore, while PSN has not disclosed debt covenants (last reported at $52.1 mln), if we use an assumed 2x – 3x TTM debt/EBITDA limit, a restated TTM EBITDA of below $17 mln - $26 mln, or the restatement itself, could result in lenders requiring repayment vs. a last reported cash balance of $3.5 mln. Under Review.
Love the comment about correctly identifying the risk...like what about the four reports prior?