Originally Posted by
Lucifer
Debt matters not; so long as revenue exceeds the servicing of the debt..... Still, even then, creditors will often revise and restructure the debt rather than face getting pennies on the dollar in bankruptcy. I'd expect them to use the COVID crisis as cover to renegotiate first; then a bankruptcy if that fails. Their BOD will be satisfied that it wasn't their fault, it was COVID's, and they made every reasonable effort to save the company prior to Ch.11
In the end however, all debts must be paid.
Well, when you are borrowing money at 12% for 5 years (at the same time I’m refinancing my mortgage to a 15 year at 2.4%) it says something about what the market thinks your chance of doing that is. Granted, most of the earlier debt is around 8%, but even so...$40 billion at 8% is still $3.2Billion a year in debt service and currently they are Not making ANY profit just going deeper in debt.