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Strategies & Market Trends : John Pitera's Market Laboratory
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sixty2nds
To: John Pitera who wrote (21258)9/10/2018 2:41:11 PM
From: John Pitera2 Recommendations  Read Replies (1) of 33421
 
Ten Bonds With Prices Higher Than Tesla’s

By Alexandra Scaggs Sept. 10, 2018 11:16 a.m. ET

(Yup 62nds... TSLA = Dead man walking)

Prices of Tesla’s high-yield bonds plunged last week. PHOTO: COURTESY OF TESLA

Tesla’shigh-yield bonds took a nosedive after the departure of the company’s chief accounting officer.

The bonds traded as low as 82.77 cents on the dollar during Friday’s session, according to Bloomberg, though they moved back up to 83.83 on Monday morning. Those levels are very low for a company with an enterprise value of $57 billion that has repeatedly promised it will be profitable in the third quarter.

In case you were wondering how low, here’s a selection of other companies with unsecured bonds trading higher than Tesla’s. All of them have the same rating, or lower.

It’s important to point out that this is not a straightforward comparison, since most of the bonds below were trading at yields significantly higher than Tesla’s 8.3%.

But simply in terms of cents on the dollar, it seems worth pointing out the price of Tesla’s unsecured bonds is now in league with names like:

• JC Penney;

•Indebted rural phone company Frontier Communications;

• Bausch Health Cos., the reincarnation of Valeant Pharmaceuticals;

•The LBO vehicle for a plastics-molding equipment company called Husky Injection Moldings Ltd., which is run by a man named John Galt;

•The Ukrainian government;

• Ocwen Financial, which you may remember from its multiple mortgage-related settlements with regulators;

• Iridium Communications, the weirdest satellite play of the 1990s;

•Two payday lenders called DFC Finance Corp and CNG Holdings; and

• SRS Distribution, a roofing company that tried to issue a loan that included what Covenant Review called “ some of the worst covenants that we’ve ever seen” in its contracts. (The covenants were later tightened.)

With bonds like these, who needs equity?

barrons.com
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