Originally Posted by
bid.shader
Thanks. Currently those 9% bonds are trading at a spread of about 530bps over Canadas, which is why I was surprised to see you quote the 10+% financing cost on secured debt.
So, about 5.8% yield at the moment? That's a nice gain for anyone who bought those last year.
It's really hard to know what
new secured financing would cost though. I don't know the value of the collateral pool that secures those notes and how much excess there may be; it would be interesting to see how much the value of the gate slots, in particular, has gone down due to COVID. I'm not sure they could sell any more notes against that pool and get something close to that rate, or whether it's tapped out. And while AC used to provide regular updates on how much of the fleet was unencumbered, they stopped doing that last year. So I don't know whether they still have a bunch of planes they can put up for 1st lien financings, or whether they're going in to 2nd or 3rd liens against those, or a 3rd lien against the collateral that secures those 9% notes.
I think overall the package has been received OK. Stock trading down about $1 but well above deal price.
I had been holding the stock for a few weeks thinking it would get a bump when a bailout was announced, but sadly that's not the case
