One month ago, the debt of Pinetree Capital (OTCPK:PNPFF) was brought up as a potential value investment. The company's debentures had fallen to barely over 60 cents on the dollar, as the company was in violation of a covenant which specifies that its debt to assets may not exceed 33%.
Yesterday, the company requested that the maximum ratio allowed under the covenant be temporarily lifted (for nine months) from 33% to 50%. In return, the company has offered the following:
- An increase in the annual coupon from 8% to 10%
- Best efforts to buy back par value $20 million of debt
- Best efforts to issue $5 million in equity
- A consent fee of 6% of par in cash,