RE: Target price before the end year Several catalysts to increased liquidity and equity interest.
To add to Kitty's expectation's of further initiated coverage, the notes are now covered by two rating agencies. This increases liquidity of the notes as some portfolio mandates need two ratings to hold securities. It also increases the ability to borrow against securities. It's the largest sigle issuer in the HY Index and will get interest from retail and institutional buyers. Banks will cover the equity as well for this reason.
I also highlight that CANSO now controls 21.51% of the companies capital stack (16.7% equity, 25.8% senior notes, 30% sub notes). Equity ownership has increased 2.2 million shares in 2013. Smart money.
DBRS has a higher issuer rating that the secured notes rating, the opposite of S&P. I expect they will upgrade the secured notes following the required $100mm paydown and the change in executive leadership provided they affirm guidance that supports their ability to meet cash sweep targets.
DBRS joined S&P in rating the securities of YPG. They assigned YPG Financing Inc an issuer rating of B low to Yellow Media Ltd (B low, B), a security rating of CCC high (CCC high, B+) to its secured bonds. The trends are stable and the low rating actions reflect the continued erosion of the company’s revenue.