Bombardier Inc. T.BBD.A

Redemption of notes

[organeer]

I see this in the article, can someone "explain like I'm 5" and tell me what these notes are, some kind of debt? What bombardier tried to do and whether these numbers are good?

Thanks
organeer

GlobeNewswire

 

Publishing date:

Jun 28, 2021  •  23 minutes ago  •  2 minute read  •   Join the conversation

Article content

 

MONTRAL, June 28, 2021 (GLOBE NEWSWIRE) — Pursuant to Bombardier Inc.’s (“Bombardier”) notice of redemption dated June 3, 2021 (the “Notice”) relating to all of its outstanding 8.750% Senior Notes due 2021 (the “Notes”), Bombardier today announced the calculation of the redemption price for the Notes. The redemption price for the Notes will be US$1,041.39 per US$1,000.00 principal amount of Notes, consisting of the Make-Whole Premium of US$1,033.86 per US$1,000.00 (based on a Treasury Rate of 0.051%, as calculated by Bombardier on June 28, 2021), plus US$7.53 in accrued and unpaid interest to but excluding the redemption date for the Notes, all as calculated in accordance with the terms of the indenture governing the Notes.

The redemption date for the Notes is July 2, 2021, as set forth in the Notice.

[johnney]

It,s made so no one could understand their bullS$T!

[clubhouse19]

Don't put anyone in the same boat as yourself if you cannot understand. Another useless countless post from Johnney..

[johnney]

Then come out on this board to explain this to us!!

[johnney]

You could see it, by the SP today that everyone understands their Note Bonds!!

[clubhouse19]

  What's so hard about understanding buying back a loan and paying for the lost income of the lender and paying a premium for retiring that loan ??   Amounts to a cost for cancelling a signed contract.<<

[Jim99999]

Yes, this is repayment of some long term debt (LTD). At the beginning of the year, BBD had about $10.1B in LTD and were in financial difficulty. In January, they sold their train division to Alstom, which netted them $3.6B. In addition, they had about $1.8B cash on hand, for a total of about $5.4B. They are putting as much of this as they can afford to against the debt, but need to keep about $1

[Jim99999]

And if you were asking more specifically about the numbers in the news release, it is costing BBD $1041.39 for each $1000 of debt they pay off (for this particular bond series). This is entirely normal. Jim

[PabloLafortune]

Excuse me Jim, but why do you believe they "have to" maintain $1.5B of cash on hand? I'm looking at BBD's main competitor and they maintain very little cash, they are actually into a credit line (or were at last report).  If - and admittedly that's a big if - Bombardier can get a significant (ex $2B) secured credit line, would they not be able to take the aforementioned

[johnney]

Some traders are doing a very good job now, don't they!!

[Jim99999]

I am using the figure of $1.5B as this is the figure BD mentioned in Q42020 conference call that they want to keep on hand. He also mentioned that they are in the process of determining the optimal amount of cash to hold, and that the number could come down over time.   I agree that a low interest LOC would free up some of that cash and allow it to be used toward debt.   The

[PabloLafortune]

Jim, excellent answers, thanks.