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Author: uffnik Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46842  
Subject: Need help Date: 5/7/2005 4:08 PM
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Hi collective,

I´m looking through the latest news release of REVLON and on the balance sheet I found this term on the asset side: "debt defeasance trust "

Could anybody help me understand this term in its economic meaning?

thank you in advance, uffnik

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Author: emiller8988 Big red star, 1000 posts Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38257 of 46842
Subject: Re: Need help Date: 5/7/2005 4:30 PM
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http://www.volaw.com/pg308.htm

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Author: uffnik Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38258 of 46842
Subject: Re: Need help Date: 5/7/2005 4:49 PM
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Hi emilller8988

and thank you very much. I read the description and I want to recapitulate it with my own words.

So REVLON has 197 mio "non performing receivables" and wants to change it to another type of receivable "to amortise the cost of writing-off the non-performing receivables over a period of years".

Could this mean, that if REV has about 200 mio "bad receivables" and cannot write it off immediatly ?
Quote : "it is usually the case that the 'receivables' being removed from the balance sheet are in default on both interest and principal and commonly carry no current cash flow"

I digged into the balance sheet of Q4 2004 for I was eager to find the balance sheet position where the 200 mio come from. But I was not able to find it. Hmmmm..

Maybe you can tell me, if my assumptions regarding the meaning of the "debt defeasance trust" are o.k.

Thank you very much again

uffnik

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Author: uffnik Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38259 of 46842
Subject: Re: Need help Date: 5/7/2005 5:22 PM
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Hi emiller8988

I think I found the solution of my problem.

REVLON has announced that it will reduce 116,2 mio of 8 1/8 % Senior Notes and 75,5 mio 9% Senior Notes . For this reduction and to extend the maturities of other debt, REVLON has completed the offer of 310 mio new Senior Note at 9 1/2 % annual rate.

REV has therefore effected a convenant defeasance (sic!)

Thank you for reading,
uffnik

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