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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: kollmhn who wrote (188333)	1/24/2015 5:49:28 PM
From: Ed Ajootian	1 Recommendation Recommended By ItsAllCyclical Read Replies (1) of 206325

kol et al, MHR -- thanks for your thoughts. I haven't checked the terms of their latest bank line but many of those now have provisions restricting the payment of preferred dividends if certain financial hurdles are not met (which are set higher than the normal loan covenants). Not sure if that is the case here, but that could be a reason that the preferreds have lost so much value recently. Didn't realize they had so little of this year's natty production hedged. Maybe next month will be real cold, as some are calling for, and they will get a chance to layer on some more hedges. Regarding Jane's hope for a buyout -- I believe all the preferred issues that are outstanding for this company have made the prospects of a buyout very problematic, since a buyer would not want to pay off these things at par at this point yet the holders would probably refuse to sell for much less than that. If a buyer has to pay off the preferreds at par there is little or no value to the common, as far as I can tell.

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