Replies to post #3160 on Global Value Investing

[throwerw]

Now that Yellow Senior Bonds are rated B+, I really think we see a refinancing within 2 years. On average, B-rated bonds are yielding 6.7%, while BB rated bonds are yielding 4.2%. After the principal outstanding is reduced by $200-300m, I can see the bonds being upgraded even further. Interest expense could be cut by 30% or more, resulting in even more FCF, quicker debt repayment, and ultimately enhanced equity value. Everybody wins but especially the warrants.

http://www.reuters.com/article/2013/01/16/idUSWNB002HM20130116