I wrote earlier about Clearwater Seafoods Income Fund and their solvency issues. They had two maturities due – a small one in late September, and a much larger one on December 2010.
I have been an interested spectator to see how this resolves. I am not interested in purchasing either their equity or debt.
The first announcement in this refinancing game was on September 28, 2010, when Clearwater came to an arrangement with the September debt holders.
Of the CAD$11.9M debt that was due, three of the debtholders consisting of a majority ($8.8M or 74%) of the amount agreed to extend the debt to December 15, 2010, with the penalty of raising the coupon from 6.7% to 10.5% and the accumulated interest to date.
The rest of the minority holders (26% or $3.1 million) will be paid off the interest and debt principal.
So the company managed to pay off $3.1 million of debt, and deferred $8.8 million for less than three months.
The big maturity coming up (December 31, 2010) is a $45 million issue, which trades as CLR.DB on the TSX, with the last quoted value of 88 cents on the dollar. The relatively large price suggests the market anticipates that there will be a refinancing at relatively attractive terms for the underlying company. If Clearwater manages to get around this debt hurdle, there are successive hurdles to be cleared in 2012, 2013 and 2014.