Energy Investing - ATH Reports. whoever has the notes has them by the short hairs.. Can you explain the risk? - Energy Investing - InvestorVillage


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Msg  342260 of 353148  at  7/29/2021 5:04:33 PM  by

liltex1


 In response to msg 342058 by  RedSpecOil
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Re: ATH Reports. whoever has the notes has them by the short hairs.. Can you explain the risk?

 This above my pay grade for sure since I'm not a Financial guy either. By the short hairs, I mean it grossly limits them in many ways besides being a high interest rate for a small company. It likely is crimping their ability to unrestrict the restricted cash they have on the books. And with it coming due 2/2022 that date is looming over their head and their stock price. It is also interesting that they are not buying this debt. Leads me to believe they don't trust the note holders and my guess is others are seeing the same thing. These high interest bearing notes and the restricted cash are the gray cloud over this companies head. That is what I mean on having them by the short hairs among other things you can read above. Unknowns. 
 
On February 24, 2017, Athabasca issued US$450.0 million of Senior Secured Second Lien Notes (the “2022 Notes”). The 2022 Notes bear interest at a rate of 9.875% per annum, payable semi-annually, and mature on February 24, 2022.
 
The 2022 Notes are not subject to any maintenance or financial covenants and are secured by a second priority lien on substantially all of the assets of the Company. Subject to certain exceptions and qualifications, the 2022 Notes contain certain covenants that limit the Company’s ability to, among other things, incur additional indebtedness, create or permit liens to exist, and make certain restricted payments, dispositions and transfers of assets. 


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