Originally Posted by
Excargodog
Why would somebody sell bonds that last required a 12% effective coupon to move (11.5% coupon but they sold below par in June) to refinance a government loan at LIBOR (currently about 1%) plus 3.5%.
Either you believe there is going to be massive inflation driving the inflation rate up to five or six times what it is now (possible, but unlikely in as short a period as five years) or you REALLY want to get out from under the executive compensation limits under the CARES Act.
On the good news front, Fitch isn’t contemplating further credit downgrades at present, although they just downgraded the senior secured debt already out there, which will drop its value in the secondary markets.
This I don’t understand. Without the full terms I guess we really won’t have all the context. Pretty sure they are so confident they’ll make money hand over fist that they don’t want the restrictions. Bold move for management.
Does anyone else remember cringing hard during the state of the airline when we were told AA will never lose money again? Airline gods were like, ohh yeah.. Pandemic!