GREY:STPJF - Post by User
Comment by
edmbondson Sep 02, 2014 11:12pm
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Post# 22899761
RE:STP Debs vs. The Rest
RE:STP Debs vs. The RestThe FP data is useful for screening only. You have to remember you are looking at apples and oranges.
What matters is where the debentures sit in the capital structure. For STP, they sit third behind almost $400M in higher ranking debt. In many cases in the FP table, debentures and notes rank much higher and are sometimes the only debt.
There is real value at STP-Mackay and Senlac. The question is will current equity holders realize any of it? Likely very little. It seems clear that success with the big bet on the ICDs will only buy STP the ability to raise additional funds (equity or debt with warrants likely), both of which which would be seriously dilutive to current equity. Success means that the debenture holders have a chance.
Credit Suisse is going to get out whole. 2nd Lien note holders are going to be OK, especially if they bought at a discount in the secondary market. Debenture holders have a decent shot. Equity is going to get whacked no matter what and zero is a possibility.