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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Bearcatbob who wrote (164765)2/29/2012 5:39:45 PM
From: sammie444 Recommendations  Read Replies (3) of 206304
 
In ATPG's case, they have first lien debt secured by the infrastructure assets; the bonds are secured by 'not less than 80% of the engineered present value of our and the guarantors' proved oil and gas properties in the US' and capital stock of the guarantors (which are only US subsidiaries). The NPIs and GORRs are senior to the bonds, so as a 2nd lien bondholder you are behind them also. After the first lien debt was paid off and the NPI/GORRs were dealt with (uncertain as they have a claim on revenue to the extent the wells produce), which I think would impact sale/auction value, the bonds would be pari with any leftover value from the infrastructure, trade claims and value of reserves/producing assets; subordinate to debt at foreign subs but again a pari claim on whatever was leftover with other creditors. S&P, in its latest writeup stated they believe the bonds would see 0-10% recovery in the event of default. I know many in the credit markets think bonds recover 40 cts or less in default. Pfd gets paid next if anything left (unlikely) and common clearly looking at a donut if these guys default anytime soon.

hope that answers, if not grill me, like staying sharp as credit is my forte.
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