RE:RE:Not only do they have no cashThose who are saying that the debentures are the least of their worries are, I feel, missing the point.
The debentures are a mechanism to
gauge market sensitivity to default from the perspective of those who are the most concerned. The banks and other senior landers recognize that a demand payment at this time will simply leave them with capital they can't liquidate. This is why the revolving credit remains - and will continue to do so - until the market turns around or it is clear that the trust is no longer able to service the debt.
The debenture holders, on the other hand, are fickle. They are not interested in the long-term future of the trust; they simply want to receive their coupon stream and final payout when the debt is due. Therefore, the current value of the convertibles is a better indicator of the "health" of the trust than the share price.
That said, moves in the share price and debenture price should be somewhat in lockstep. The fact that this is not the case at the moment suggests that the share price is being somewhat artificially depressed due to speculators. It is likely this rabid speculation is depressing the share price much more so than the fundamentals, even with Parallel's current balance sheet.
The point is that Parallel should be VISIBLY addressing the common share speculation. Not doing so leaves them open to more short sellers driving the stock price down even when the debtholders are becoming more optimistic.
TheCapitalist wrote: Joe454 wrote:
The cash coming in is getting less and will get lesser , they also have a big bank debt to worry about , the debentures are their least worry.
Cash coming in from operations will indeed be less. However, they should still realize profits from the hedges that they have in place.
Furthermore, while it's entirely speculation on my part, the process of turning the market around is already under way. Rig count is down, therefore reducing output. As the trend continues, supply will meet demand.
Given the expense to start up rigs once they've been shut down plus the growing consumption of oil and gas in the U.S. market, an undersupply may be possible in the future (again, speculation).