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@Dan
It is old, old, old news. This has been dealt with following the conclusion of the SFO case against PFC. The market cares not one jot about this, I assure you, as PFC has sorted itself out and new management team is in place. It is done, finito a non-event from PFC angle.
Criminal cases against the individuals who committed the actual offences take bloomin’ ages to come to court. Hopefully they get the book thrown at them.
If this is a genuine document, then it is dynamite.
THERE IS NO WAY ON GOD’s GREEN EARTH THAT MORGAN STANLEY WOULD ADD IF THE EQUITY IS GOING TO BE WIPED OUT BY D4E.
Shorters should take note and quietly exit stage left.
Great day for the longs.
@PaulCurtis
Every post you write defends your rationale for investing in the bonds - i.e. that they are indestructible against equity.
Can I refer you to the below.
https://www.wsj.com/articles/credit-suisse-bond-wipeout-threatens-250-billion-market-10be7d04
Happy reading 😊👍
@PaulCurtis
Conversely, why if PFCs finances are so parlous would any customer place work with them - they would fail even the most basic financial due diligence tests.
Could it be that the bonds are going to take a hair cut and there is nothing that the major bond holders can do?
Or are the bonds being shorted in order to support the equity short positions being held by the hedge funds . . . ?
Whatever the outcome this is a very interesting conundrum - who is right? Longs or shorts? Long on bonds or long on equity? Time will tell, but my money is on equity winning out and bonds recovering to almost par.
GLA
@PaulCurtis
No mate. You’re wrong.
That view was as welcome as a shart in a spacesuit.
How are the bonds doing?
Never in my life have I seen such a scam of a company.
Sucker people in with promises of finding massive volumes of oil.
Never do. Issue literally billions of shares to fund SS’ lifestyle.
No chance in heck this will survive the year. It will be wound up.
Best off out. No revenue, massive expenses, negative shareholder value.
Shocker.
. . . that today will end up blue
33.08 to sell, 34.44 to buy.
MMs stifling volume. Wonder why that is . . . 🤔
OMG
Mobilecheck
ANOTHER 1 POST WONDER 🙄
Contract renewals indicate to me that PFC is doing just fine.
The short position hedge funds have called it wrong.
Marshall Wace called it correctly and have now exited stage left.
The others are left holding a ticking time bomb, nervously eyeing each other not wanting to be last out.
Not long now 😂🤣😂🤣
Hold the line!!!!!
. . . by short position hedge funds to control the price
Volume has picked up and it’s extremely choppy out there.
They mist be getting quite nervous now, increasingly aggressive. This afternoon’s trading could be a right old dust up between shorts and longs. Like properly good to watch 🤣😂
NM
An interesting article which some may have missed.
A government and regulator prepared to take action to keep the playing field level. . .
https://asia.nikkei.com/Spotlight/Market-Spotlight/South-Korea-s-stock-short-selling-ban-raises-political-questions#:~:text=5%2C%20at%20an%20unscheduled%20Sunday,2024%20%2D%2D%20almost%20eight%20months.
@StockNor
When a stock is “in play” per PFC, I’d trust technical analysis as much as tea leaves.
You were fortunate to get out without a loss. In your instance, placing a stop loss was a sensible move. A more sensible move would have been to hedge with a long at the lower levels . . .
@StockNor
Off you toddle sonny. Next time try going long. Only way you can win with PFC at this price.
Byeee!
Bonds gain from 35.27 (historic low in 23) to 49.25 so just under 60% with a potential for a maximum further gain of 100%
Equity gain from 14.58 (historic low in 23) to 30.12 just over 100% with potential for 250% plus gain in near term (next 6 months)
I have place my investments accordingly.
@PaulCurtis
The short position hedge funds aren’t closing yet because they still don’t realise how much trouble they’re in.
They’ve called it badly wrong - either they haven’t realised yet or have realised and are praying for something to give them a palatable exit. But their time is running out fast.
There won’t be an equity wipe out via D4E. There won’t be a RI at this level. There will be some assets disposals (most likely upstream). There may well be further bond issuances with first call on say the Tennet contract incomes . . . The current bonds will drop as they lose some seniority.
@PaulCurtis
The cash position has got worse, agreed, but marginally not dramatically - per the update.
Performance guarantees are being obtained but at a higher amount of security being required by the companies granting them. Again, per the update.
Impact upon next cash outflow is negative but not materially so.
The real challenge for PFC is not operating per se, it’s in obtaining the increased amounts cash of provide collateral required to secure the performance guarantees for the swathe of huge contracts that they have just won.
So that is why the bonds are under pressure. My bet is that PFC are going to go and get more bond finance with much better returns (say 10-12%) over period where we are going to see global interest rates fall away (returning to 2-5%) so the yields will be much better than the curent debt, making them uncompetitive.
Paul, have you bought a dog?
@PaulCurtis
Marshall Wace, the only “serious” player that was shorting PFC has closed its position (at least reduced to below 0.5%)
The others are amateurs. They do get things wrong.
The RCF will be refreshed. As stated by PFC covenants remain intact. The cash position is constantly improving through better recoveries per most recent update.
The challenge has been that the security requirement for performance guarantees has been significantly increased. This has impacted cash flow. However, the first Tenet PG has been paid, others are looking positive too.
Net debt will settle slightly higher at y/e but that is due to increased PGs.
There is and has been no question over ability to service the bonds interest repayments, and no urgency around capital repayment which is not due until November 2026, so don’t go spreading rumours that that can’t / won’t be able to meet those obligations as it is not true.
Overall, I am comfortable and confident in PFCs management’s ability to negotiate this speed bump.
All will be well, your bond investment is good, but as I said before, you’ll make more on the equity 👍