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Usec Inc. - Some Additional Tables

|Includes: Centrus Energy Corp. (LEU)

As shown in the previous Instantblog, the PPS implied by the current CB can be described with the used of just two variables:

  1. Expected Trading Price of the New Bond (as % of Face Value)
  2. Trading Price of Current $540m CB (as % of Face Value)

For Example:

If the $540m CB is currently trading at 30% … and you expect the new issued bond after the reorganization to be trading at 50% ….

… then the Value of the Equity owned by all Current shareholders after the Reorganization is currently Valued (by the Bond Market) at $3.92m

… based on the 4.9m common shares outstanding, it translated to a PPS of approximately $0.80

… Since USU is currently trading at $3.50 … if follows that the PPS is overvalued by approximately 337% (with respect to the price Implied by the Bond Market)!

  1. In this case, you are better off … buying the CB bond … instead of the common shares.