Bombardier Inc. T.BBD.A

2028 notes at 6% : Positive

[lb1temporary]

They get 750 M$ by notes with a 2028 term at 6% . Issued at par. It's positive and show the improvement of the market sentimen for the Bombardier debt.
Last week, before the results, I bought some 2026 BBD notes and get a 7,1 % return for the next 5 years. 
The 6% rate for 7 years is a positive achievement.

[PabloLafortune]

This is good news - last year the yield to maturity of the 7 year bonds (2027's) was in the 20% range for a while shortly after Martel took over...... The icing on the debt sundae would be a $2B credit line so they can apply most? of the $2.2B cash sitting at the bank to paying off LTD. That would save a lot of money. this is what GD does. right now Bombardier is essentially their own bank....

[BBDB859]

You're right Pablo. This is great news. They could be financing themselves without an LOC from now on till (Dec. 2024), their next debt maturity waiting to see the rate, they could be borrowing for next. From what I'm seeing with this $750M placement? My guess is that they finally took my advice of paying about 30% to 35% down, and refinancing the rest of the loans maturing. That's

[PabloLafortune]

859, by the way, if you exclude cash on hand and current portion of long term debt from current assets and current liabilities respectively, Bombardier has a slight surplus. I can't recall when the current portion of the balance sheet was in this (positive) state. To give an idea, 2 years ago Q2, current assets excl cash was $10.9B (and that included $800M of assets held for sale.........) and

[BBDB859]

Hey Pablo. Thanks for doing this. Great information. Do it that'll be great. I can use some help here, with #'s. Please. Jim was very helpful too with the debt, cash on hand etc. I'm sure things will get even better for the company going forward. Cheers

[PabloLafortune]

859, after double check I used the 2020 Q2 #s not the 2019 ones.  Also I should include the assets held for sale.  Still in 1 year company went from a $1.864B working capital deficit to a $1.824 working capital surplus an improvement of $3.7B....

[BBDB859]

Wow that's huge. This company is transforming itself pretty quickly. Thanks Pablo, that's great stuff. Sorry for the late reply I was out the whole day. 

[PabloLafortune]

By the way, Tourmaline Canada's largest natural gas producer just got $200M 8 year money for 2.55%. Of course they dont have much debt and are making money hand over fist right now. Would be nice if BBD could borrow at those rates one day....

[BBDB859]

Hey Pablo. The beauty of this 30% to 35% pay for every maturity due is that we get to keep all of our cash ($2B) on hand until we get the EBITDA up to $1.5B as they are predicting.  The sales are catching up slowly. Look they're going to be making more money soon. It's a given and all you have to do is look at the difference from Q1 to Q2 in revenues. Up $181M. That's just 1

[MartinStock]

Not sure they'll split.... if 2.4b is too much action, they'll do this: Well received by the market, the operation involves a listed company buying back part of its outstanding securities. The repurchase is intended as an intervention by the said company on its own capital, with the consequence of reducing the number of shares in circulation on the stock exchanges. The management can thus

[BBDB859]

Hey Martin. Thanks for that. This outfit, lead by PB has been a disaster so far, surounded by the likes of Bellemare, dumb Lawyers, and other Financial incompetents. I wouldn't want a forward split either. I suggested it, for reducing the float. There are other ways, especially at this low share price, as suggested by your post. I'm not crazy about dividends for right now, either. They

[PabloLafortune]

859, just my gut feeling but the stock will not rise much further until the debt is somehow brought down or more specifically, ratios improved (debt to ebtida and ebtida/interest). I could be wrong, as you say if they raise EBITDA that also improves the ratios. GLTA.

[BBDB859]

I see what you're saying Pablo. Don't forget Management's plan is for 5 years from now. Now that the runway is cleared till Dec. 2024, which btw was hardest thing for Bombardier to do, the EBITDA is falling into place quite nicely in just the Second Quarter. So we'll see +FCF sooner than you think. From Quarter to Quarter. Look who knows, Exponential growth is really wishful

[Shamhorish]

yes, it is positive, but (i may be wrong) i see is as if they renew same ling term debto expiring on 2022, etc to 2028 at the same rate 6% !!!!!!!!!!!!  (ami wrong???) it would have been much better if they were able to get those 750 miilion at 5% instead of 6% at 6% the amount of annually paid interest did not decrease !!!!!!!!!! nothing changed excpet pushing expiry date to 2028

[lb1temporary]

You are right, but expressed differently: The rate increase with the term. A 6% rate for 7 years is cheaper than 6% for 18 months. You are right that the interest expense will be the same for 2022 but they had to reimburse it at the end of the year, meaning tht the pressure on the cash will remain. They got a 7 year term at 6%, there's the good achievement. They got a reimbursment

[Shamhorish]

lb1temp, thank you yes, it is good that they extended the due date to 2028 bbd will have clear path to 2024