GREY:LSTMF - Post by User
Post by
boarderex86on Jan 02, 2015 2:31am
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Post# 23278941
Suspend Divi, Purchase notes at market price
Suspend Divi, Purchase notes at market price
Does anyone know how much of a discount LTS notes are trading at? It now seems to be broadly accepted that the shale business a largely a debt treadmill. This reality coupled with low prices will mean death for the weakest producers but LTS netbacks beat most of their peers and their debt maturities are still a few years away. This gives hope for LTS shareholders that the company can survive to see WTI recover. The best thing for LTS at this point in time would be to cancel the dividend to maximize capital available for repurchasing their debt at a discount while the market continues to loath the shale business. This is a huge opportunity because the market is not placing any value on the current distribution and leverage concerns continues to weigh on the stock. Cancelling the debt will payoff in the long run and help mitigate the risk of a covenant breach in the medium term while we wait for oil prices to recover.