Comments for Divestor

Comment on Yellow Media Q4 projections by Will

Will — Wed, 22 Feb 2012 11:25:41 +0000

Furthermore, there are no restrictions against using operating cash flow to buy back MTNs. The company can save enough each quarter to pay back the NRT loan when it comes due and use the excess cash to buy the MTNs. Ultimately it should have the same result since the company should generate $125m over what is needed for the NRT within the next year. However, using some of the credit facility now would allow the company to take advantage of current market conditions, which may not last all year.

Comment on Yellow Media Q4 projections by Will

Will — Wed, 22 Feb 2012 10:11:08 +0000

I suggest you listen to the call yourself… all they have to do is pay down the facility and then they can draw it down again for the 2013 MTNs. Since the cash is there they could do it today… or maybe they already did it, who knows.

Comment on Yellow Media Q4 projections by TomCat

TomCat — Wed, 22 Feb 2012 03:53:03 +0000

From a DBRS report dated February 13 2012:

“In its Q4 2011 earnings statement released on February 9, 2012, Yellow Media announced that it had … drawn $239 million of its $250 million revolving credit facility in Q1 2012 … DBRS also notes that drawing on its revolving credit facility precludes Yellow Media from repurchasing up to $125 million of its 2013 debt maturities in the open market, as would have been allowable under its September 2011 amended credit agreement.”

http://dbrs.info/research/245276/dbrs-downgrades-yellow-media-s-ratings-trend-remains-negative.html

Comment on Yellow Media Q4 projections by Will

Will — Tue, 21 Feb 2012 12:05:15 +0000

Specifically the 2013 MTNs

Comment on Yellow Media Q4 projections by Will

Will — Tue, 21 Feb 2012 12:04:44 +0000

It can be used to buy up to $130m of the MTNs.

Comment on Yellow Media Q4 projections by Goose

Goose — Tue, 21 Feb 2012 00:50:18 +0000

I believe that the revolver cannot be used to buy MTNs – unfortunately

Comment on Yellow Media Q4 projections by Will

Will — Mon, 20 Feb 2012 23:52:58 +0000

2013 MTNs trading at 44 and 39 now… the company could use their revolver to pay down all of the MTNs at these prices and would generate enough cash to pay down the revolver by the deadline in early 2013.

Comment on Yellow Media Q4 projections by Will

Will — Mon, 20 Feb 2012 10:28:56 +0000

The company is obviously not losing money… it could be timing of interest payments, pension expense, deferred tax payments, canpages restructuring expense, etc. There really isn’t much to go by until the Q1 results are out.

By your numbers, the company still makes it through 2013. If the first MTN matures in July, that gives them 6 months to generate cash to pay it off; same with the December maturity. EBITDA is decaying but so is interest expense as debt is paid down. Interest coverage at the end of 2013 will still be around 5x.

Comment on Yellow Media Q4 projections by Sacha Peter

Sacha Peter — Mon, 20 Feb 2012 05:49:55 +0000

Hi Will,

Let’s pretend $550M EBITDA is the number (which would be about a 19% haircut from 2011 results).

Interest is $120M with the credit facility money drawn;

CapEx of $50M is reasonable.

Taxes of $125M is from the company’s estimate. Leaves $255M FCF for 2012, so $280M cash (February 9, 2012) plus $255 is $535M cash. Credit facility is $180+$239, leaving about $116M for the MTNs, $130M due in July and $125M due in December; since the cash generation is decaying, you’re still slightly short on cash. Still, a lot closer where you think they would get some high-rate loan for 2014.

The question that should be answered, however, is why YLO has $280M in cash on February 9, 2012. If they had $84M cash on December 31, 2011, drew $239M from the facility, and paid of $25M on the non-revolving portion, it means they burnt $18M cash in the first 5 weeks of the year. Timing? Or just losing money?

Comment on Yellow Media Q4 projections by Will

Will — Sun, 19 Feb 2012 20:06:33 +0000

So… did you have a different model?