The Company has elected to pay PIK Interest in the amount of approximately $79 million for the interest period commencing on March 15, 2009 to enhance liquidity in light of the current uncertainty in the financial markets.No surprise there.
This latest PIK election brings the total of toggling PIK bonds to 22 or more than half of all outstanding, as of the 52 PIK notes have been issued, 6 have been redeemed and 2 have filed for bankruptcy, while Harrah's recently reduced the size of its PIK issue by $350 million. The remaining 22 issues amount to $17.7 billion. The 22 bonds in which investors are likely to never again see any cash payments (if default expectations are any indication) prior to their eventual bankruptcies are the following:
• American Media Operations 14% subordinated partial PIK notes due 2013
• Berry Plastics 11% subordinated partial PIK toggle notes due 2016
• Claire's Stores 9.625% senior PIK toggle notes due 2015
• Digicel 9.125% senior PIK toggle notes due 2015 (note: reverted to cash-pay)
• Freescale Semiconductor 9.125% senior PIK toggle notes due 2014
• Harrah's Entertainment 10.75% senior PIK toggle notes due 2018
• HCA 9.625% second-lien PIK toggle notes due 2016
• Intelsat Bermuda 11.5% senior PIK toggle notes due 2017
• iPayment 11.625% senior PIK toggle notes due 2014
• Laureate Education 10.25% senior PIK toggle notes due 2015
• Metals USA L+600 senior PIK toggle FNS due 2012
• Momentive Performance Materials 10.125% senior PIK toggle notes due 2014
• National Mentor L+637.5 senior PIK toggle notes due 2014
• Neiman Marcus 9% senior PIK toggle notes due 2015
• Noranda Aluminum L+400 senior PIK toggle FRNs due 2015
• Noranda Aluminum Holdings L+575 senior PIK toggle FRNs due 2015
• Realogy 11% senior PIK toggle notes due 2014
• Symbion Healthcare 11% senior PIK toggle notes due 2015
• TXU (Texas Competitive Electric Holdings) 10.5% senior PIK toggle notes due 2016
• TXU (Energy Futures Holdings) 11.25% senior PIK toggle notes due 2017
• Univision 9.75% senior PIK toggle notes due 2015
• US Oncology L+450 step-up PIK toggle notes due 2012
If analyzed by private equity backer, it would seem that TPG is in the most trouble as of its 11 PIK notes, it has opted to toggle 7 of these including Aleris (in ch.11), Freescale, Harrah's, Neiman Marcus, US Onco and TXU. Additionally, ZH would not even recommend to look at Apollo's bonds as an indication of the PE company's status as everyone pretty much knows the answer to that one already. Sphere: Related Content
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