Tuesday, May 5, 2015

"Molycorp Senior Creditors Said to Submit Restructuring Plan" $MCP

From Bloomberg:

"Houlihan Lokey and Kramer Levin Naftalis & Frankel, which are advising holders of Molycorp’s $650 million of 10 percent first-lien secured notes maturing in June 2020, submitted the plan in late April... The proposal includes swapping a portion or all of the notes into equity...

The plan, which would cut Molycorp’s debt load and interest cost, is based on the creditor group’s expectation that the securities would be impaired in a restructuring while the company’s lower-ranking 3.25 percent convertible notes due in June 2016 would get wiped out... Molycorp has also been negotiating with holders of the $206.5 million in convertible notes, led by Apollo Capital Management LLC, to push out the debt’s maturity date and convert it into equity..."
Brilliant. There have been signs that MCP would need to restructure.

Molycorp has some big interest payments coming up in June. On the unsecured 3.25%s, there is a coupon 6/15 of $3.74 million. On the secured 10%s, there is a coupon due 6/1 of $32.5 million.

Incredible that MCP has a $220 million market cap - with bonds trading sub-10 and people talking about a piece of secured debt as the fulcrum.

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