722 days ago
Of course CEO Peter Wall (who dumped shares at 243p a year ago AFTER starting sounding out folks about a 200p per share placing) insists that this debt is not dilutive. Really?
2909 days ago
Sound Energy (SOU) has today boasted that it has signed heads of terms for Euro 28.8 million of new bonds with a coupon of just 5%. Sound fantastic. Except that if you dig into the detail you will see that, in fact, Sound could get away bonds only at junk pricing with a related party. That tells you that its shares are a stonking sell.
3627 days ago
I have noted before how the yield to maturity on Gulf Keystone (GKP) Bonds was a terrifying sell signal on the equity. For folks who have ignored me I have bad news: it is getting worse.
Before Gulf managed to get away its last $250 million bond issue the YTM on its existing 6.25% bonds was a terrifying 15% - well into junk bond territory. However the most recent IMS seems to have ignited fears that Gulf might just need yet another refinancing as Lucian Miers flagged up HERE.
And so the YTM
3679 days ago
Not deterred (in fact spurred on) by my death threat last night I offer up two new insights for those unlucky enough to own Gulf Keystone (GKP) shares. I do not delight in your misery just suggest that you consider cutting losses before they become even greater. As they surely will. First to the bond market.
It has been suggested that the secondary market in the existing $325 million of bonds is so illiquid that the price means nothing. Au contraire. It is the price of shares, set by buying and selling by –very often – uninformed investors which is wrong.
An interesting tweet emerged yesterday from Waz Shakoor, a man with an amazing record of buying deeply distressed bonds at the right price – he made a killing buying Greek bank debt. How many folks can say that? Waz tweets:
3690 days ago
The share price of Gulf Keystone (GKP) is driven by private investors. The bond price is driven by more informed individuals and it is now screaming out JUNK!
Two days ago the October 2017 6.25% bonds were trading at 88p. Today they are trading at 75p. That means that implied yield to maturity is c15%.. I.e. if you buy these bonds in the secondary market you will get an annual return (assuming that Gulf can repay) of 15% per annum. That is a junk bond type return.
Now ask yourself
3841 days ago
Terry Bond has been the executive chairman of AIM Cesspit posterboy Vialogy (VIY) since its launch. Last year as the company recorded another whopping loss he trousered a pay packet of £181,261 even though the company also has a CEO and a CTO. Is he needed? Is he an asset? Or just another cash drain on a company which is weeks away from running out of cash? It's the latter. It's time to Junk Bond.
