YLO - debt restructuring example - no dilution

http://glenbradford.com/files/Stocks/YLO%20debt%20dr.xls

Hey Glen,

I thought I would pass this out the group.  I have added a worksheet (marked 'Pro-Forma) indicating how a debt restructuring can look like, without diluting the stock.  It assumes paying face value for all debt.  By the end of 2020, under this example, debt would be reduced to $600 million.

Key points:

• pay off the NRT with the money raised
• clear the revolver with the cash from the February draw down
• purchase and retire only the 2013 to 2015 MTN's... keep the remainder in place until due
• optional, clear the debenture issue
• issue a new 15 year MTN with a callable feature beginning in 2017, thereafter 10% of the issue can be called annually (I've used 7.5% interest)
• restore preferred dividends
• the A's have not been addressed as it can be a separate issue of preferred shares
• at the end of 2020, the model indicates YM will have $350 million of available cash.

At face value, the new note(s) would total $987 million if the debentures are included.  Now, any fund can make a killing by strategically buying debt at market and agree to restructure it into the new notes.  Of note, the NRT is being refinanced over the 15 year period.  The can make an even bigger killing by buying the common and preferred shares at market

The fund would not even have to hold onto the note as they can sell it into the market piecemeal or share it with other funds once YM becomes investment grade.

IMHO, this is so easy to fix... know any billionaires? V

http://glenbradford.com/files/Stocks/YLO%20debt%20dr.xls