RE:RE:Net Debt Calculationpierrelebel wrote:
Why is the debt carried in the books different from the face value of the obligations? The answer can be found in the auditors note #9 (Sept 30 2014 repost):
https://canexus.ca/documents/Canexus-2014-Third-Quarter-Report.pdf
It is highly technical and you can look it up if really important to you.
From my perspective, the debt analysis presented earlier says it all.
Pierre: I read Note 9 in the 3Q14 report several times before my initial post. Again, as I put to Blue just now, it says "The Series IV, V and VI Convertible Debentures are considered to be Level 2 financial instruments not carried at fair value. Their fair values as noted in the table above were determined using their closing price on the TSX at September 30, 2014, less the fair value of their embedded conversion option derivatives. At September 30, 2014, the fair values of the embedded conversion option derivatives of the Series IV, V and VI Convertible Debentures were $0.9 million, $5 million and $14.9 million, respectively, which were determined using a Jump-Diffusion convertible pricing model." It clearly says they are NOT carried at fair value, then goes on to explain how fair value is calculated.
The Converts are listed on the balance sheet at $287 million.
The principal of the converts is $313 million (3Q14 Report: Note 12)
Note 9 states the converts at $227 million (Note: this is fair value calculation); also, this amount is less than the amount stated on the balance sheet.