I see in the S&P language it is still a "proposed" issue. For those in the know - would a ratings agency do these analyses of proposed notes issue independantly off their own bat?
Proposed because LNC have not raised the funds yet.Hence the word proposed or "impending" Yes they do research so companies that want to lend, know what the risk assessment is according to SnP.That's what their jod description is a ratinds agencey. New debt equals "a rating" as harsh as it maybe this is hard nose finance not ....oh we think the assets are worth much more...or some story about UCG.
My interpretation is that if Linc continue to meet their oil production targets and maintain at least $25M in the bank their rating could improve from the current B.
BTY LNC is B- (Not B)
My reading is that if it does'nt LNC will be downgraded to CCC.
"Lets see what the next quarterly brings."
If they dont meet production targets and have less than $25 cash in the bank then the next rating below B would be CCC or perhaps they will stay as a B. The good news is that today S&P believe Linc could repay this new debt albeit subject to the future unkinowns of oil price and production success. A big increase in Umiat 1P and/or 2P reserves would be a handy jackpot.
Umiat imo "has oil" the issue is "it cost $1 billion" to extract it ....that's the problem not the fact that there maybe oil.Its not a jackpot senario as it is a know fact since 1940 what is not know is how much to get it to market.
LNC Price at posting:
70.5¢ Sentiment: Hold Disclosure: Held
