{"id":6233,"date":"2015-03-05T20:29:09","date_gmt":"2015-03-06T01:29:09","guid":{"rendered":"http:\/\/olduvai.ca\/?p=6233"},"modified":"2015-03-05T20:29:09","modified_gmt":"2015-03-06T01:29:09","slug":"shale-company-defaults-on-175-mm-in-bonds-without-making-a-single-interest-payment","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=6233","title":{"rendered":"Shale Company Defaults On $175 MM In Bonds Without Making A Single Interest Payment"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2015-03-05\/shale-company-pulls-movie-gallery-defaults-175-mm-bonds-without-making-even-one-coup\" target=\"_blank\">Shale Company Defaults On $175 MM In Bonds Without Making A Single Interest Payment<\/a><\/h3>\n<p><strong><em>Update<\/em><\/strong>: And just to prove that people are indeed, idiots, moments ago this hits:<\/p>\n<ul>\n<li><strong>ENERGY XXI GULF COAST, INC. PRICES UPSIZED PRIVATE OFFERING OF $1.45<br \/>\nBILLION OF 11.000% SENIOR SECURED SECOND LIEN NOTES DUE 2020<\/strong><\/li>\n<\/ul>\n<p>We set the odds at 75% that not even odd coupon payment will be made in this case either.<\/p>\n<p>* * * * *<\/p>\n<p>It was just this past June when a report on Seeking Alpha quizzically asked, &#8220;<a href=\"http:\/\/seekingalpha.com\/article\/2274483-can-american-eagle-energy-corporation-fly-high-like-an-eagle-over-the-next-months\">Can American Eagle Energy Corporation Fly High Like An Eagle Over The Next Months<\/a>?&#8221;<\/p>\n<p>The answer, it turns out, is no.<\/p>\n<p>According to a Bloomberg report, the Colorado oil producer, whose stock is now trading at a very\u00a0<em>sub<\/em>-eagle $0.20, or about $6MM in market cap (the stock was at $6.00 when the Seeking Alpha report came out) has announced it will not make even one coupon payment on its bonds issued less than seven months ago.<\/p>\n<p><a href=\"http:\/\/www.bloomberg.com\/news\/articles\/2015-03-05\/oil-driller-missing-first-bond-payment-marks-junk-s-fast-decline\">Bloomberg reports\u00a0<\/a>that after raising $175 million in a junk-bond offering, American Eagle Energy Corp. said Monday that<strong>it wouldn\u2019t make its first interest payment on the debt.\u00a0<\/strong>And instead of fulfilling its naive bondholders dreams that they will collect an 11% annual coupon for the next 5 years and then get repaid in full, the company hired bankruptcy advisers, Canaccord Genuity and Seaport, to negotiate a restructuring plan with the bondholders. Said bondholders now have two options: give the company more time to try to become profitable (i.e., hope that oil somehow soars from here) or push it into default, and become the new equity holders following a debt for equity.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Shale Company Defaults On $175 MM In Bonds Without Making A Single Interest Payment Update: And just to prove that people are indeed, idiots, moments ago this hits: ENERGY XXI GULF COAST, INC. PRICES UPSIZED PRIVATE OFFERING OF $1.45 BILLION OF 11.000% SENIOR SECURED SECOND LIEN NOTES DUE 2020 We set the odds at 75% [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[3946,88,3949,3947,3948,723],"class_list":["post-6233","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-american-eagle-energy","tag-bonds","tag-coupon-payment","tag-junk-bond","tag-seeking-alpha","tag-shale-oil"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6233","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6233"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6233\/revisions"}],"predecessor-version":[{"id":6234,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6233\/revisions\/6234"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}