Linn Energy Debt Is Oversold: Long Senior Unsecured Because It Is Likely Below Recovery Value
Brian Shiau, CFA • 91 Comments
Brian Shiau, CFA • 91 Comments
Linn Energy: Should One Bet The Farm On Commodity Prices?
Richard Zeits • 54 Comments
Richard Zeits • 54 Comments
Tue, Apr. 26, 4:45 PM
- Linn Energy (LINE, LNCO) says it completed its first exchange offer for the holders of soon-to-be worthless shares, who are trying to avoid a tax hit as the company moves toward a bankruptcy filing.
- Linn says more than 103M LINE units, or ~29% of the total number of outstanding units, were exchanged on a one-to-one basis for LNCO shares.
- Linn also says it is beginning a second exchange offer to expire May 23, to allow more LINE unitholders to become LNCO shareholders; the company says participants in the second exchange could still avoid much of the trouble that would occur when the restructuring plan takes effect, rather than when it files for bankruptcy.
Fri, Apr. 15, 8:13 AM
- Linn Energy (NASDAQ:LINE) and LinnCo (NASDAQ:LNCO) +20% premarket after announcing they made ~$60M in interest payments on senior debt within the applicable 30-day grace periods, for which payment had been deferred from the original March 15 due date.
- Linn elects to exercise 30-day grace periods for a $31M interest payment due April 15 and $27M in payments due May 1; failure to make payments would result in an event of default.
- Linn is in the process of exploring strategic alternatives to strengthen its balance sheet.
- Now read Linn Energy: What investors would get in the case of bankruptcy
Thu, Apr. 14, 2:23 PM
- April defaults for U.S. high yield bonds, headlined by bankruptcy filings from Peabody Energy (NYSE:BTU) and Energy XXI (EXXI -72%) plus a missed payment for Linn Energy (LINE -15.4%), now total $14B, after Q1 defaults came in at $15.7B, according to a report from Fitch Ratings.
- The trailing 12-month rate for junk bond defaults has surged to a two-year high 3.9%, Fitch says - 12% of all energy companies, 23% of E&P companies with EXXI's $2.8B in outstanding debt, and a 70% rate in the coal subsector including BTU's $8.4B debt.
- U.S. crude oil prices have staged a mini-recovery to ~$40/bbl but remain below typical breakeven production costs, so B- or lower-rated E&Ps are struggling in the secondary market, with 57% of those companies bid below $0.50, the ratings agency says.
- Now read Energy XXI: It's just business, nothing personal
Wed, Apr. 6, 8:09 AM
- Linn Energy (NASDAQ:LINE) says it entered into a settlement agreement with some of its debtholders about potential restructuring that could include Chapter 11 bankruptcy.
- Linn says the agreement was with creditors who hold two-thirds of its $1B outstanding senior secured second-lien notes due 2020, and that it is no longer in technical default over mortgages associated with the notes.
- LINE -2.5%, LNCO +3.2% premarket.
- Now read Linn Energy is out of default... for now
Wed, Mar. 23, 3:23 PM
- Linn Energy (LINE -14.2%) and LinnCo (LNCO -16.8%) are both sharply lower following news of their one-for-one exchange offer, announced after yesterday's close.
- The companies say the exchange offer running through midnight on April 18 will allow unitholders to maintain a stake in LINE through LNCO, which is taxed as a corporation instead of a partnership; the deal also may allow unitholders to avoid future allocations of taxable income and losses, including the cancellation of debt income resulting from potential debt restructurings or other strategic transactions.
- Seeking Alpha blogger Jordan Flannery says the move is a tax ploy that likely is a prelude to a Chapter 11 restructuring.
Wed, Mar. 16, 3:24 PM
- Linn Energy (LINE +16.4%) shares regain some of yesterday's 30%-plus loss caused by "going concern" language in the company's financial statements and the deferment of $60M in interest payments on some of its notes.
- LINE also said yesterday that it did not fully secure a bond swap with the agreed collateral, which would create a major headache for its creditors if the company seeks bankruptcy protection.
- LinnCo (LNCO +46%) also is on the rebound after plunging 42% yesterday; the company also filed to withdraw a equities shelf registration statement, citing current conditions in the public capital markets.
Tue, Mar. 15, 8:53 AM
- Linn Energy (NASDAQ:LINE) -21.4% premarket after saying in its Q4 earnings report that it expects to fall out of compliance with the terms of its credit facilities, which "raises substantial doubt about the company’s ability to continue as a going concern."
- LINE says it is skipping ~$60M in interest payments due March 15, electing to exercise a 30-day grace period, and is evaluating strategic options to shore up its balance sheet.
- LINE says its 2016 capex totals ~$250M, down 44% from $450M spent in 2015, resulting in an expected 14% Y/Y drop in full-year production; says it is shutting in ~1,000 marginal wells, impacting 2016 output by 50M cfe/day.
- LNCO -25.2% premarket.
Tue, Mar. 15, 6:59 AM
Mon, Mar. 14, 12:45 PM
Mon, Mar. 14, 9:17 AM
Fri, Mar. 11, 9:17 AM
Wed, Mar. 9, 3:44 PM
- Linn Energy (LINE +24.2%) is exploring a change to its corporate structure that could shield investors from a tax hit triggered by a likely debt restructuring, WSJ reports, adding that distressed MLP peers are watching closely and hoping LINE can provide a blueprint for them to follow.
- Among the options Linn advisers reportedly are exploring are merging Linn with its LinnCo (LNCO +0.1%) corporate affiliate or letting investors swap Linn units for LinnCo shares ahead of any restructuring.
- MLPs pay no corporate taxes and instead pass certain tax burdens, along with a share of their income, to investors; debt forgiven in a restructuring counts as non-cash income, or "cancellation of debt income,” which creates a tax liability for investors without an associated cash distribution.
Wed, Mar. 9, 12:47 PM
Wed, Mar. 9, 9:15 AM
- Gainers: LINE +27%. ATSG +24%. REXX +21%. DNR +19%. CRC +17%. BUFF +14%. LNCO +14%. BIOC +14%. SXE +14%. CJES +14%. SGY +14%. BETR +11%. AMRN +10%. BTE +9%. DANG +9%. BCEI +8%. GGB +7%. WLL +7%. SDLP +7%. EXPR +7%. CLF 6%. PBR 6%. CHK 6%. PBR.A 5%.
- Losers: SDRL -13%. DSX -9%. BPT -9%. GRPN -5%. PLNT -5%. YELP -5%.
Tue, Mar. 8, 9:17 AM
- Gainers: SUNE +29%. LEU +24%. OMER +14%. BNTC +12%. TERP +11%. URBN +8%. ORIG +7%. SOL +6%. BCRX +5%.
- Losers: PSG -35%. EMITF -18%. OCLR -15%. REXX -14%. EPE -11%. FBR -11%. CRK -10%. LINE -10%. SHAK -9%. VNR -8%. SDRL -8%. BCEI -7%. LNCO -7%. RIO -7%. CRC -7%. BHP -6%. VSLR -6%. BTU -6%. JBLU -6%. ARP -6%. TSEM -6%. DNR -6%. BBL -6%. MT -5%. VALE -5%.
Mon, Mar. 7, 5:40 PM
Linn Energy, LLC is a oil and natural gas company, which engages in development, exploitation and acquisition of natural gas. It seeks to be the operator of its properties so that it can develop drilling programs and projects. The company was founded by Michael C. Linn on March 14, 2003 and is... More
Sector: Basic Materials
Industry: Independent Oil & Gas
Country: United States
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