@leverage, I couldn't agree more on the "back self interest"(Paul Keating in quoting his mentor, Jack Lang: ''In the race of life, always back self-interest - at least you know it's trying''), and "debt serviceability" notions.
On that basis, shareholders are of course making the bet that TB has enough incentives that are aligned with shareholders (in other words minimal cash bonus and more equity incentives to surpass the performance metrics that create value (cash) for the company). No need to dig up history there.
The other notion is what I've probably spent 80% of my time on SSN trying to figure out and sharing with other shareholders.
The 3rd Amendment to the MOB Credit Facility was not kind to SSN ... and they said as much with the "... these amendments could make it materially more difficult to operate our company..." statement.
MOB has backed their self interest with very rigid constraints with barely enough freedom to operate (those would be the minimum liquidity covenant and the require of paying 50% of net cash flow to repay the BB each month.) And without doubt the requirement to find $5M of new equity contribution and $10M of paydown to BB makes their asset coverage look quite secure (but they are first in the queue of claims and shareholders are last).
What I don't understand with MOB, especially given the challenge in this June Qtr and coming Sep Qtr is why bother if you don't see the longer term gain. I cannot determine whether or not MOB has extended the maturity date of the Facility. It seems implied in coverage tables but not explicitly stated in the amendment - if not extended then the debt is still current and maturing in Jan 27, 2017. Not a good thing and I don't think I need to describe why. This is most likely only going to known with the availability of the AR.
Debt Serviceability is why Debt/EBITDAX and Interest coverage ratios are put in by the lenders.
GFTA
SSN Price at posting:
0.5¢ Sentiment: None Disclosure: Held
