Mirant

[Joe Stocks]

CPN- From Yahoo
CC Reaction
by: chamois16 05/05/05 05:10 pm
Msg: 735681 of 735741

Purely my opinions an an investor, not an industry guy
No real surprises
Kelly's comments seemed inconsequential, since he seriously fuzzes up descriptive words, accounting terms, opportunities, options and projections. I even heard the 60¢ on the dollar phrase.
For example, he frequently seems to shift among the terms "cash flow," "operating cash flow,"
"EBITDA" and "adjusted EBITDA" to make various points which would otherwise come across much differently.
Which is his EBITDA projection for 2005 of $1.6B-1.7B? Which is the EBITDA for the claim that debt 5-6 times EBITDA is acceptable to lenders?
Someone name a lender who believe 5-6 times GAAP EBITDA is an acceptable level of debt.
He confirmed that HTIII will be refied with converts/equity
He acknowledged the possibility of another debt downgrade, and said a credit upgrade was now likely when debt was reduced to $15B.
He made a point of how operating O&M was now reduced to $5.15/MWH, but that was when normalized to 70% cur. At 44% CUR, it is higher, and fixed operating costs/mwh skyrocket.
Liquidity opportunities for the next year or so seemed to focus on monetizations, which usually means sale of future earnings on a NPV discounted basis.
I thought I heard at one point that after repayments of short term loans related to Saltend, balance would be used to pay down debt secured by that EC. If so, that seems a concession to Harbert.
(Hard to believe Beth Perrella's phone call was a mechanical failure (s).)

All that said, there were some favorable
numbers wrt buying time. Maybe interest is building in buyng CPN assets, but the devil is in the details. The Mitsui deals are helpful, and it is hard to believe Pastoria and Metcalf won't make money in the near years.

I moved my "material default" probability up from 40-45% to 45-50% on the basis of timelines needed for operating performance trend change and debt maturities milestones. Material default is not synonymous with either restructuring or bankruptcy, but is often a precursor. 2206 will be the real test, imho.