Member Info for Cranleigh

“Next very few weeks”

I doubt we’ll have that long to wait. CF addressed JPM’s High Yield conference in Miami early this year, and this issue has been known about for almost 3 months.

I appreciate that the target customers may be different, but on the last two occasions JPM have had $400m of CBs to sell, they seem (less any retained by them) to have gone in more like a few hours....

FT: "A marketing campaign for the bond will start in London on Friday".

I guess they mean next Friday, 26 July. Done and dusted before the City go on hols?!

Likely IMHO to be subject also to definitive completion on the JPM $2.5bn RCF

I would say yes to that Slurms, in which case maybe better terms than junk bonds....

Correction, reading the small print....."The offer and sale of the Notes will be made pursuant to an exception under the Prospectus Directive, as implemented in the EEA member states, from the requirement to produce a prospectus for offers of securities".

So, no prospectus expected...

Confirms they will be senior secured bonds, as anticipated, with maturity 2027 and some details of security.

But no mention of timing of next steps, eg prospectus, rating, coupon, roadshow...

I need more nails, please - I read it as £200K each year during the construction period, so probably c£1m.

Hope that at least after the Welcome organisation is cleaned up, most of this money ends up where intended...

No I don't agree.

The bonds will be senior secured, and those security rights (as well as the coupon entitlement, redemption rights etc) will pass from one owner of them to another when they are sold...whether that be to the first owner, the second owner or the nth owner.

"The substance of my point".

I guess you mean you now accept that the bondholders will receive the coupon, not pay it back to JPM? On that basis:

1. From page 276 of the 1 May Prospectus we only know some of the terms of the Initial Bond Engagement letter, but I think, like you, that JPM are likely to take a (IMHO small) margin in one form or another on these bonds, possibly a straight commission from SXX.

2. The idea that bond buyers might have any recourse to JPM is IMHO laughable. They are senior secured bonds, so the bonds' security will be on the business, undertaking and assets of SXX. And I have an inkling that JPM just might have dabbled in the bond market before and have, with the help of their cheapo legal advisers, the nous not to be left with any potential liability.

"to pay both the coupon and JPM's profit margin" - that seems most unlikely to me - surely the buyer would pay a margin to JPM, but RECEIVE the coupon. Otherwise he is effectively buying a negative-yield investment.

"Fact-based analysis" - really?

Casa, you don’t seem to realise that - apart from any cash - the bondholders and JPM would have to SELL the assets to recover their money.

So it becomes a matter of judgement as to what price one thinks they could achieve. I think it would be a pretty good one - look at the NPV.

Casa, I think you are going down the wrong path.

The bondholders’ security is little to do with balance sheet numbers, and everything to do with what they and JPM could sell a part-finished mine with a disruptive product, a 100+ year prospective life and over 10mtpa of TorPs for - most likely to a mining and/or fertiliser company.

My guess is, stripped of the current Shareholders and Gina’s royalty, that would be a very pretty penny indeed.

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.....

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.

Invoiced!! Predictive twaddle

Excellent, Myo....if it WAS a spoof.
Trust you have invited them your £45?

A flat fee of $500m would be nice - avoid all that Prospectus, rating, roadshow etc hassle!

“myo’s initial guess”. ....deliberate irony? I’m not sure Myo does guesses...

I agree, debtnmarrijslave - hung over or not!

The percentage of total shares lent (good proxy for total shorts IMHO) per Euroclear has dropped, suggesting that the absolute number of shares shorted has remained virtually unchanged since the Stage 2 equity issue.

If/when the SP rises significantly, I suspect we will see holders of the new, May 2027 5% CBs starting to hedge in earnest, in which case the % lent will rise again.