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That’s only applicable in a public raise LITC.
There is plenty scope for it to be as previously discussed as an alternative financing package which is acceptable to JPM.
"The three main components that need to be in place ahead of the launching of the bond are: finalising the bond offering document, completion of the revolving credit facility paperwork, and finally, the receipt of a public rating from the rating agencies.
According to City broker Liberum, Sirius bosses are hopeful of getting these bits finished in time to allow them to kick off the roadshow – where they promote the bond to institutional investors – ahead of the August holidays, although that is dependent on third parties."
Doesn't the above from house broker Liberum make it pretty clear (provided one assumes they know what they are talking about, which hasn't in the past always turned out to be the case), that details of the IB offer (and therefore also of course the credit rating) will be in the public domain before the bonds are actually sold?
If the above is correct, then the roadshow will need to be off and running in the next couple of weeks...
"Mature Phase: After several years of POLY4 adoption and performance and further development of value-added products, the Company may be able to implement above-nutrient value pricing."
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#beyondwoodsmith
Hi
Re this first bond. From the 1/5 prospectus p 186:
"On 30 April 2019, the Company entered into the Initial Bond Engagement Letter, pursuant to which the Company has agreed to engage J.P. Morgan Securities (acting directly or through its affiliates) to act as initial purchaser of the Initial Bonds on a best efforts basis, as well as for future bond issuances to refinance or replace amounts drawn under the RCF. In those circumstances, J.P. Morgan
Securities would endeavour to procure purchasers for the full US$500 million of Initial Bonds currently contemplated as part of the Stage 2 Debt, but would not be under any obligation to acquire any Initial Bonds for which it cannot procure purchasers. "
"..would endeavour to procure purchasers.."
From that it cannot be known whether that will involve the public route to selling bonds or, as suggested, a more 'chat to your mates' type of deal. The latter has the potential to be quicker and I would favour it to get this done...provided costs are realistic re yield, fees.
It may aslso be the case that JPM, having got the positive vibe from other lenders, lend to SM all this first $500m and then only slowly over time syndicate what they wish to on to others.
Whatever the 'mists of fear' seem to be clearing with decisive price action. Just a penny short of my av of activity from Nov last now and a lot of potential upside ahead. For instance: future poly price? Check projection p156 & what it is thought this product will be valued around in time with:
"Mature Phase: After several years of POLY4 adoption and performance and further development of value-added products, the Company may be able to implement above-nutrient value pricing."
P157.
GLA.
GK.
The $500million HY bonds (or other means) only has to satisfy JPM.
No doubt JPM will milk any arrangement to best reward themselves. So long as it remains affordable.
Let’s just get it raised and then we can focus on getting through the aquifers.... ;-).
That will be another major de risk.
Not so sure it was in the Stage 2 announcement, but certainly in the 1 May Prospectus, eg p4 “issuance of the full amount of Initial Bonds or another financing raising gross proceeds of at least US$500 million”
Enjoy your full English.
One can’t exclude (yet) another change of financing plan, but (a) I think that same wording about “or another acceptable US$500 million debt financing” appeared in the Stage 2 announcement and Prospectus, and (b) CF detailed in the conference call the workstreams being progressed re the Initial Bonds - Prospectus, Rating.....
Good morning Casa/Cranleigh,
Interesting concept Casa and one I could run with. Reason being, it’s something I picked up on in the Q2 update.
This is the paragraph above that quoted by yourself Cranleigh.
The net proceeds of the New Convertible Bonds have been placed in an escrow account and will be released to the Company upon the issuance of US$500 million senior secured guaranteed bonds (the "Initial Bonds") (or another acceptable US$500 million debt financing) and entry into the proposed US$2.5 billion revolving credit facility with JP Morgan Chase Bank N.A., London Branch (the "RCF"), expected to occur no later than the end of September 2019.
This bit in particular,
(or another acceptable US$500 million debt financing) .
Maybe this doesn’t require the traditional prospectus, credit rating etc.
This 500million dollars only has to satisfy JPM to access the RFC and release the escrow held CB cash.
Let’s face it, 500 million USD is a drop in the ocean in the bonds market.
Heading out for a full English with my wife and wee ones. The only thing playing in my head today is, shall I have brown sauce or mustard?
From the 2 July quarterly update: “The Company is making good progress on all workstreams connected with the proposed US$500 million issuance of Initial Bonds and entry into the proposed US$2.5 billion RCF, which will together complete the Company's stage 2 financing.”
I think there is some conflation and confusion going on here, perhaps due to Casapino’s talk of “framework agreement” having been reached, and that we will never know its detail.
So far as the $2.5bn RCF is concerned, the key features were agreed just before the 1 May 2019 Prospectus and described in it. That is what I would describe as a “framework agreement”, which is now to be replaced by definitive documentation, which I would not expect to come into in the public domain.
But the $500m of Bonds indeed require a Prospectus that will be in the public domain, rating by the Rating Agencies and (probably also) a road show to sell them.
Sheep, for me, being "on track" implies JPM lining up investors because the bond sale couldn't be completed without lining up investors.
Of course, in a sense until it's formally done, it's not done. But playing devil's advocate I'm clutching at straws when I question that statement in the context of the entire picture.
Very very happy to agree to disagree on that point though.
Just get hold of yesterday’s Daily Mail
Hi Casa,
I concur with your views. Prospectus / terms / details are not for wider audiences.
As for the other part, it goes back to 'believe' or not, in CF magic to pull this through, although SM is becoming bigger and stands a little more on its own two feet, with or without CF (at least after this bond raise).
Soon we will find out.
IMO
M
This has already been stated in previous RNS’s. Don’t come here trying to knock the share if you don’t have all the information
Quite an unambiguous statement here for starters.
https://www.proactiveinvestors.co.uk/companies/news/223176/sirius-minerals-confirms-us38bn-stage-2-financing-on-track-to-complete-by-end-of-september-223176.html
No SheepOfWallSreet - it was literally a list of top five risers and list of top five fallers with reason - quite good though to see Sirius at the top for once and I liked the reason!
Good post thanks and agree interest could be at least staying low and possibly going lower which as you say has got to be good
for SXX , i think there will be plenty of investors wanting to buy the bonds IMO .
Cas, I had no idea about all that, yet my assumption based on common sense about the strength of the project, strategy and % returns was also that the bond sale is probably all but done. I'm prepared to take a big chance on that hunch and transfer parts of my pension into SXX on Monday.
Thanks for your posts.
Hi Scotman. My assumptions (based on what little evidence is in the public domain) is this.
SXX's deal will be with JP Morgan, it is a private arrangement and so , though notifiable to the markets via RNS , the full terms and conditions will not be made public.The reasons for this are , I hope, reasonably obvious, JPM will not want other banks to know details of their business , their terms and their margins.
SXX statutory duty will be to tell the markets what final terms, including the full costs, they have agreed for the deal with JPM for the funding, but no more detail than that.
As the arrangements put in place by JPM will not be offered to the wider public markets ,but only to the selected band of institutions brought to the table by JPM, a prospectus will, AIUI, not be needed, nor necessarily will these intermediate terms ever be made public.
My guess is (and it is only guesswork based on snippets of data)that JPM have now lined up a panel of insti's willing to provide sufficient funds, indeed I suspect JPM were lining them up some months ago,and that the likelihood of the funding has gone from possible to probable.
As all must recognise that doesn't mean the deal is done, but IMV(and only IMV)we are in the when ,not if, scenario. Exact terms have no doubt still to be thrashed out and that will, no doubt take some time, and those terms may prove extremely onerous, though again IMV, the fact that interest rates are not moving up anytime soon is good news for borrowers of which SXX is one, and that there is a lot of money looking for a profitable use to be put to , is also positive for SXX.
As said recently, I am re-investing here on the basis that the SP has bottomed, that funding will be found (whatever the cost)and that the project is on a more financially stable footing for the medium term.
Whether I am right will become clearer within months, perhaps weeks.
Casapinos, will the framework not need a prospectus?
Will the prospectus not need a credit rating?
Just a couple of innocent overlooks?
"Fool me once, shame on you. Fool me twice, shame on me".
Fool me thrice?? Doesn't bear thinking about.
Not long now....
;-)
They succeeded in May - nothing to stop them trying again.
—
Nothing to stop them succeeding again either if the latest timeline is to be adhered to.
Third party holidays and all that!
Casapinos, "whether the end of ST2 is nigh.....?"
Ok crikey, the end of ST2 will definitely be a champagne cork-popping moment for me, after all we've been through.
The end of an era! (Thank God)
Lawrence,
In a word, no.
Caution is still required - its just possible that the SP is being manipulated upwards as it was between the 7-10th May - then the shorts came in, the day traders fled and lots of stop losses were taken out as the SP plummeted.
The shorts game would be to play on the nerves of investors and try and trick us into thinking that there was a problem with the bonds - in other words create panic.
They succeeded in May - nothing to stop them trying again.
LawrenceH / lot of shares but a big company that will be worth not millions but Billions ,