Thursday, December 03, 2009


At least they have to pay the interest in cash and not aluminium.....;-) Even when this is in part an Kreml lead attempt to save the oligarchs but the"Pay-If-You-Can-Loans" are close to kick theToggle/PIK Bonds from the top spot of "innovations".... ;-) Michael Panzner with his comment "return of irrational exuberance in the credit markets" is spot on. ZH with this summary The High Yield Market Has Officially Topped, With Bondholders Eager To Cash Out Existing Equityholders In The Crappiest Of Names & Distressed debt on the wane in US markets confirms the view that memories are short............

Immerhin müssen wohl noch die Zinsen gezahlt werden......Selbst wenn ein Teil dieser Praxis dem Kreml indirekt dazu dient die Oligarchen zu retten schafft es die Art der Kreditvergabe bzw. Restrukturierungen doch fast inzwischen legendären Toggle/PIK Bonds vom Spitzenplatz der Innovationen zu vertreiben... ;-) Denke das Michael Panzner mit seiner Bemerkung"return of irrational exuberance in the credit markets" der Wirklichkeit ziemlich nahe kommt..... ZH mit einer Auflistung an "Absurditäten" aus dem Kreditbereich ( sieheThe High Yield Market Has Officially Topped, With Bondholders Eager To Cash Out Existing Equityholders In The Crappiest Of Names & Distressed debt on the wane in US markets) bestätigt die Ansicht das hier etwas erheblich aus dem Ruder gelaufen zu sein scheint.....

Bankers Say Deal Is Near to Restructure Rusal’s Debt NYT

Rusal, the world’s largest aluminum producer, which is struggling under $17 billion in debt, is close to an agreement with about 70 banks to restructure its loans on terms considered favorable to the company and its billionaire owner, bankers said on Wednesday

The banks will allow Rusal to operate essentially under a pay-as-you-can agreement, though pegged to aluminum prices, according to terms made public this year. The company will be permitted to roll missed payments into the capital and begin repaying principal only when the global economy recovers, and with it prices for aluminum.

Rusal signs comprehensive debt restructuring deal MW

Russian aluminum giant Rusal said Thursday it has signed a deal on the comprehensive restructuring of its debt of $16.8 billion. The restructuring of $7.4 billion debt to international lenders will be split into two phases, the company said. During the initial four-year period, principal repayments will be made on a "pay-if-you-can" basis predicated on the performance of the business, while the second phase will involve the refinancing of the remaining debt by current lenders for an additional three years.

Rusal has also signed agreements on the restructuring of $2.1 billion of debt with its Russian lenders. It has also agreed with Onexim, a Russian investment fund, to restructure $2.7 billion in debt and to convert $1.82 billion of debt into a 6% shareholding in Rusal. The remaining $880 million of debt will be restructured on the same terms as applicable to the international lenders, with the accumulated interest thereon to be paid in cash.

Rusal's CEO Oleg Deripaska said Rusal "is ready to focus on implementing its new strategic objectives." There has been media speculation in recent weeks that Rusal is preparing for an initial public offering in Hong Kong, though the company hasn't confirmed these reports ( Deripaska plays down Rusal delay > no quick "pump & dump"....)

Rusal Gains Approval for Hong Kong Listing WSJ

But the green light was given on the condition that it won't sell the deal to retail investors, in a bid to "protect" Hong Kong's retail investors from the complexities of the deal ( No "pump & dump" )

I urge everybody to read page 6 from the following High Hendry report about the outlook of the aluminium market ( after he met with management of Norsk Hydro ).....I´m pretty sure the banks have "calculated" this "rosy" outlook in their "pay-if-you-can" repayment shedule..... The clip Prime Minister Putin Bitch Slaps Oleg Deripaska also taken from the report is "hillarious"!

I empfehle allen die Seite 6 des folgenden Reports von Hugh Hendry zu lesen. Der hatte ein eingehendes Gespräch mit Norsk Hydrdo zum Zustand der Aluminiumindustrie......Bin mir sicher das die Banken diesen "überragenden" Ausblick gewohnt konservativ in Ihre "pay-If-You-Can" Kreditkalkulationen mit einberechnet haben.....Aus dem Report auch der Clip Prime Minister Putin Bitch Slaps Oleg Deripaska den man gesehen haben sollte..... ;-)

Hugh Hendry Eclectica Nov09

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Blogger jmf said...

Weather PIKs Moment to Test Risk Appetite WSJ

Is the European high-yield bond market breaking the speed limit? Just six months after Italian telecom group Wind reopened the market, its owner, Weather Investments, plans to sell a payment-in-kind note, one of the ultimate symbols of the credit bubble. The deal is a mark of how far risk appetite has advanced.

Weather plans to raise €500 million ($741 million) from notes issued by a holding company that ultimately rely on cash flows from Wind. For four years, the notes will be "PIK"—paying interest in additional notes—but then they will switch to cash payments until they mature in 2017

10:02 PM  
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11:19 PM  

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