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OT: American Politics

lecoqsportif said:
Apparently negotiations with creditors “broke down”, so this looks like someone will take a haircut. I don’t know the debt structure, how much is senior, how much is subordinate and how it relates to equity... but it looks a little untidy.
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We know who will take a haircut, well at least I do.
 
lecoqsportif said:
Apparently negotiations with creditors “broke down”, so this looks like someone will take a haircut. I don’t know the debt structure, how much is senior, how much is subordinate and how it relates to equity... but it looks a little untidy.
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they probably lease 30-40 pct of their total fleet with the rest bought/serviced on a revolving facility and depend on rental cash flow to service the debt.

This is a once in a generation event that nobody was prepared for and a lot of biz models just aren’t equipped for it.
 
I don't mind him golfing but holy shit his swing is worse than mine. I've played golf like twice in the last decade and he has played like 300 times since becoming president. How is it possible to not improve at some point? Jesus Christ.
 
mbow30 said:
they probably lease 30-40 pct of their total fleet with the rest bought/serviced on a revolving facility and depend on rental cash flow to service the debt.

This is a once in a generation event that nobody was prepared for and a lot of biz models just aren’t equipped for it.
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They'll come out of 11 fine as bankruptcy courts will be bending over backwards to approve restructuring plans with as little debt to pay off as possible. The creditors, on the other hand, even the secured ones, won't be as pleased, as a global pandemic is a great time to try and shed debt and restructure.
 
Apparently Hertz had one billion in cash and 24B of debt. Surely they had more liquid assets? I get they may have been exposed to lease and revolving credit risk... but holy black swan.

Carl Icahn, a buddy of Dorito, owns 38% of the equity. This might be an interesting saga.
 
Law talkers: is force majeure rampant? Are parties just walking away from an obligations? Of course, if there are no revenues... I just don’t know enough about this stuff.
 
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lecoqsportif said:
Law talkers: is force majeure rampant? Are parties just walking away from an obligations? Of course, if there are no revenues... I just don’t know enough about this stuff.
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you usually can’t walk away from an obligation due to fm - it just suspends the obligation.

and yes lots of fm claims these days.
 
lecoqsportif said:
Apparently Hertz had one billion in cash and 24B of debt. Surely they had more liquid assets? I get they may have been exposed to lease and revolving credit risk... but holy black swan.

Carl Icahn, a buddy of Dorito, owns 38% of the equity. This might be an interesting saga.
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I’m more familiar w the Canadian ccaa than chapter 11, but god speed to equity in these things.

debt load is high but 1b cash is a lot of dough. But again that debt load is high because of tbe nature of the biz and how they’ve structured their assets. I can’t say enough how unprepared businesses were for this. And understandably so.
 
Hertz has 500k cars in the US alone. That’s probably about 15bn in value. Cash flow can’t support buying them all so lots of leased vehicles. All secured debt.

Then, you have to maintain / repair.
Easy to see why these cos carry heavy debt loads.
 
Secured on the non-existent revenue streams, I assume.

Even if there were assets to liquidate, is there even a market? Likely not. Doesn’t strike me as a valid option anyway.
 
Secured debt gets priority in insolvency. The owned fleet plus leases is pretty good collateral in most cases. It sounds like they’ve scaled to demand historically by auctioning cars from their fleet and that market has cratered so their fall back failed then.

thie biz is viable it just doesn’t have cash flow to make lease payments right now.

they’ll be able to sell some assets and renegotiate the debt. investors may bite the dust depending on how this unfolds.Sounds like Carlis also a creditor so he’ll make out ok in the end.
 
mbow30 said:
Secured debt gets priority in insolvency. The owned fleet plus leases is pretty good collateral in most cases. It sounds like they’ve scaled to demand historically by auctioning cars from their fleet and that market has cratered so their fall back failed then.

thie biz is viable it just doesn’t have cash flow to make lease payments right now.

they’ll be able to sell some assets and renegotiate the debt. investors may bite the dust depending on how this unfolds.Sounds like Carlis also a creditor so he’ll make out ok in the end.
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I worked for a company that assisted them in auctioning the cars. A lot of profit in doing so.
 
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