750M 2022 bond 8.75 coupon issued in March 2017 at 100, that needed to be refinanced next year, by what ?
The bond is unsecured, even at 50 is trading above Noble liquidation value.
You need to factor if Noble can issue another bond this time at 15%-20% ? and that the same investors will want to lose 100 to 50.
Even if it was successful refinance mean like paying with a first credit with a 2nd credit card.
That's one the circular reason Noble bond is at this level, burning-cash and paying too much for capital- burning cash.
We are heading towards a restructuration of Noble.
Quote:https://icebergresearch.files.wordpress....lity-b.pdf
Since we do not know the book, the next best source will be the doubters
Re-reading their arguments and compare with the current situation gave a good feel on whether the truth was with them or Noble last year.
Noble recognised that “the majority of net fair values as at 30 June 2015 is comprised of physical
commodity contracts in thermal coal, metallurgical coal, and coke”
The possibility of those contracts that are sitting on Noble balance sheet having unrealistic MTM is high. Most of the hard commodities that Noble is trading are in the doldrums especially oil and coal.
(15-05-2017, 01:51 PM)CY09 Wrote: [ -> ]Bonds pricing say so but equity pricing, it is saying the derivatives are 15% of its book value.
So who is right?
They are in agreement. A stock doesn't trade at 0.2x p/b for nothing, obviously nobody thinks the assets are worth what the company says they are worth.
If bonds are selling so below par value, it may mean bondholders are not confident of getting their full value, equating to negative equity.
According to textbooks, a stock with negative equity value should not be selling at such a high market value
"Elman is now clearly bowing out,” said Lambert, the consultant. “Appointing a restructuring expert in his stead confirms that the objective is probably one of orderly retreat."
Mr. Chairman is probably making the final effort to save the company
Man who helped bury Lehman turns to saving troubled trader Noble
http://www.theedgemarkets.com.sg/man-who...ader-noble
without substantial shareholders' support like what Temasek did to Olam, it's hard to get people's confidence back
(16-05-2017, 08:43 AM)CY09 Wrote: [ -> ]If bonds are selling so below par value, it may mean bondholders are not confident of getting their full value, equating to negative equity.
According to textbooks, a stock with negative equity value should not be selling at such a high market value
Nah its valued correctly. The 2018 bonds are currently trading at ~65c on the dollar, so upside is ~60% if the company doesn't file for chapter 11 by then. The equity however, will not have a capped upside to it, assuming the business turns around and/or gets another round of capital injection (God knows where these hapless fools are going to come from), a higher beta increases the premium on it.
Reuters: SINOCHEM NO LONGER IN TALKS TO BUY STAKE IN NOBLE GROUP -
A trader with no risk management is like playing roulette; double or quitz.
The thing that frightens banks the most is not having a risk management process in place because it opens the possibility of financial losses and frauds.
Here's an article from FT LEX Noble Group: coal bunkered
https://drive.google.com/file/d/0B5XUI3-...sp=sharing