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2phevs - Apologies I haven’t been keeping an eye on this today. Other members have commented on the interest cost of the extra raise so I think it should all be clear now. With respect to my investment, I dipped my toes about 15 months ago and managed to (painfully) average down to c. 70p.
How can you even think the Company could do debt repayments and buyback if we are not even CF positive? We recently had to borrow more to strengthen our liquidity position. These are basics of corporate finance…
You can just send them a secure message with your instructions. I asked them to vote in favour of all resolutions at the upcoming AGM and they confirmed shortly afterwards. Very smooth
Just to make sure we paint the full picture, of course it is not a good thing that the bond prices have dropped (however in this market it is hard to find ANY bond that has not dropped), the interest that the company pays on its fixed-rate coupons for the bonds does not change (so it's not that they automatically have to pay 2% more like your comment seems to suggest).
c2645sg
Listen - your attitude is terrible. You are wrong but also arrogant.
I'll answer your last questions (not for your benefit, but for everybody else's) and then I'll stop here as I have better things to do on a Friday evening than this.
To start: the notes (both senior and junior) are denominated in USD so you will have to convert your maths into GBP.
Senior: $1.184bn x 10.5% = $124m
Junior: $344m x 8.89% cash = $31m
So you have an approximate cash expense from the bonds only of $155m / £115m at today's rates
You also have a PIK component on the Junior notes that for simplicity I add on top (it actually increases notional) of $344x6.11%=$21m / £16m.
So all of that adds up to $176m/£130m. The Company also has Revolving lines, leases, liquidity lines, capex lines etc. so that could make up the difference to the c. £165m that was quoted here by you (not by me).
Ah one more thing: here the links to the RNSs - enjoy your read
https://www.londonstockexchange.com/news-article/AML/pricing-of-senior-secured-notes/14739236
https://www.londonstockexchange.com/news-article/AML/issue-of-debt/14879493
c2645sg
Look - I will respond politely because your tone is not my style.
This is the ISIN (if you know what an ISIN is) of the 10.5% Notes: US04625HAG48. Go look it up. Ah, if you don't have Bloomberg, I hope you can read the FT: https://www.ft.com/content/a0864c3c-6c20-4415-b95d-9eb729f128fa
The Senior Notes (10.5%) were priced on October 30th, 2020. There was a tap of those (do you know what a tap is?) in February 2021 at a price of 109/yield of 8.164%.
The Junior Notes were priced more or less at the same time and came at 15% vs. 13.5% guidance. The Company unfortunately went to market at a bad time - markets rallied at the beginning of November 2020 on the back of vaccine news. Finally on your other points: of course the Investment Grade bond market is bigger, I never argued the opposite. I am just saying that the high yield market is very big and there is plenty of liquidity. Lastly, for CCC-rated companies, double digits coupons are not unusual. Open Bloomberg, type SRCH and add as criteria CCC rating and you will see for yourself. Sayonara
The bonds are going to be refinanced like in every bond refinancing. You have a base of existing bondholders who will unlikely want to get their cash back (as they will have to find somewhere else to put it) and will most likely roll, plus new investors might come in IF the ratings improve. I suspect you don't know much of how credit markets and the high yield market work but the High Yield market is VERY big and there is a lot of liquidity. The current CCC ratings contains some access to investors but hopefully we will get into single-B land at some point.
Since you asked: the Senior/1st Lien tranche has a coupon of 10.5% and is currently trading to the November 2024 par call at a price of 110 / a yield of 6.5%. The Junior/2nd lien tranche has a coupon of 15% (8.9% in cash + 6.1% PIK) and is currently trading to the November 2023 108 call at a price of 116/a yield of 10%.
If you open Excel and replace the current Senior coupon with 6.5% and the Junior cash coupon with 8% (note I am not assuming a big improvement from the 8.9% current cash coupon), then you save £50m p.a. Facts.
I am sorry if this is too technical for you but this is what I do as a job and I am just responding with facts since you asked. happy to be challenged. Good Friday everyone
The bonds (both the Senior and the Junior) will be callable at par in 2024 and 2025 and are trading at a yield well below their coupon. Based on where they are trading now (and they will get tighter over time IF the company meets their target), we should expect savings of at least £50m p.a. in interests costs starting from 2025. There is further upside as I expect the junior bond to not be needed anymore over the next 4 years once the turnaround plan is fully implemented, margins improve etc. So yes, currently interest costs are painful but my view is that it will get better
Apologies it was in response to the previous post: Been watching this stock for a while and trying to figure out what a good entry point is. Today's drop (so far) should be related to Stryker results
Been watching this stock for a while and trying to figure out what a good entry point is. Today's drop (so far) should be related to Stryker results
Remember than LS invested first at £4/share and later at £2.25/share (in old money term). Of course he got diluted with the new share issue, but he himself is still a long way to be breakeven so has a strong direct interest
"Sales in China are now above pre-pandemic levels, while sales in all markets except the UK rose during the three months, the group said."
Citi comment on AM: "Since IPO AML has had a difficult time. However, with a new management team in place guidance in a manageable position we believe now is the time to revisit the Buy case. The DBX is now launched and seeing strong demand, the balance sheet is re-financed and the tech agreement with Mercedes Benz offers a cheaper means of dealing with CO2. With shares trading at a c.10% EQRP vs peers on c.6% and profits potentially increasing >3x 2021-2025 we rate it Buy."
Hi 007, I was actually referring to a refinancing of those exact facilities - when I said "soon" I meant within the 5-year turnaround timing and possibly within 2 years. The rates were very generous and clearly reflect the CCC-rating and the difficulties of the business. The 5-year secured bonds came at 10.5% at the end of October and I think if they had come a couple of weeks later, they would have probably priced at 9% or lower. They are now trading at a price of 107 / 8.3% yield. Just to give you a sense, the 5-year secured bonds of Stonegate Pubs (with all the difficulties that the business is experiencing) are trading at 7.5%. With improving performance, AML will probably start thinking of a refi in 2022. The 2026 "Second Lien Notes" that priced at 13.5% + warrants are effectively Preferred Equity-like and the alternative to those simply would have been further common equity raise and dilution this year but are clearly very very expensive.
Hi everybody, been reading the BB for a while but rarely contributed. I can confirm that MCap at IPO was ~4.5bn and we are now just above ~2bn. My background is in investment banking and I worked with AM back in 2014-2015 when they issued their HY Bonds . Met with the then CFO Mark Wilson a few times and even had the pleasure of visiting their Gaydon HQ and seeing the collection of all the old cars. IPO banks obviously do have their responsibility in getting the IPO price wrong but I do believe AM is currently underpriced and there is upside within the next 5 years, with the new management team, product launches, F1 team etc. Liquidity management will be key and hopefully there will be a debt refinancing soon which will help. GLA and hopefully this stock will make us all wealthier!