The Second Lien Senior Secured $100 notes are trading on the open market at 77% below face value.
I have traded Corporate Bonds for many years and when a decent yielding Bond trades so far below face value it tells me the market doesn't think the company will be able to repay the $100 face value of the note and hence will not survive.
The First lien Secured notes are only trading 15% below face value as if the company is wound up they have first rights on the oil assets and hence have a much better chance of recovering most of their money.
What it also says is they will not be able to raise anymore debt as why would someone purchase a new $100 note when they can go on the open market and buy a similar existing note for $22.50
As for Umiat getting into production by 2016 Linc do not have the cash to do this themselves so unless a third party funds everything it will not happen. Based on the initial drill results and the current POO I can't see anyone taking the risk.
LNC Price at posting:
99.5¢ Sentiment: Sell Disclosure: Not Held
