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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (56191)	10/30/2015 6:42:35 PM
From: E_K_S	Read Replies (1) of 79147

XCO did a secured debt refinance. In the previous post it explains the details of the refinance. I have no plans on selling but will hold to maturity. XCO is still responsible for paying both the interest and PAR value of the unsecured debt but I was pushed back in the line a bit. My debt matures in 9/2018 and is selling for $0.265/100. Part of their restructure was they bought almost 50% of this debt for $0.50/100 which they rolled into the new secured note that paid 12.5% interest. This is the debt I own which is no longer $750mln but I believe $350 mln. The 9/2022 unsecured debt was also paid down a bit from $500mln. I still receive the semi annual interest payments and should get paid off at PAR in September 2018 (as long as the assets still have value) and the common shares continue to trade. The common shares were going to have a reverse split too but not too sure of the time period. The possible end game in 2018 is (1) company pays off the unsecured bonds at PAR or (2) unsecured bond holders receive offer to exchange debt for equity (might consider if a reverse split is done) or (3) company defaults on unsecured bonds and some type of debtor in default pre-packaged BK is done. Wylber Ross still owns a large chunk of common shares as does the new CEO. I am not too worried unless those shares are exchanged into the secured debt and/or some other private equity deal that jumps above the common shareholder. My average cost on the unsecured debt is what was paid to the new secured debt holders or about $0.50/100. No plans on selling. This is just part of the refinance plan I have expected. Notice that GST now has "secured" bonds as well as their perpetual preferred shares. So "secured" debt is not uncommon but just another way to solicit new investors at the detriment of the common and unsecured debt holders. EKS

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