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CUSIP 35906AAH1

Clearly Frontier has had its issues (and frankly still has). This is a $1.1 Billion offering that looks like it has tendered its way down to $172 million over the years.

FTR looks like it should have the cash to redeem in full in 4.5 months when it is due. Does not mean that they will not file for protection before then. But if they have the cash, why not pay off this amount and still kick the can a bit while looking for solutions (asset sales, etc.) before the real big debts come due?

Was trading at 0.51 in mid-November. Now it trades around 0.62. I think that the market had priced in a restructuring, but every day one does not happen and it gets closer to April 15th, the value of this issue will keep creeping up. Clearly it is risky or it would not be priced in the sixties.

Other than a bankruptcy filing in the next 4 months, what other risk am I missing?

Can FTR be buying it back quietly on the open market to save money, or does that violate any covenants?
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Other than a bankruptcy filing in the next 4 months, what other risk am I missing?

FTR recently (Dec 3) fired their CEO. His replacement is a guy who was named to the board to advise on financial issues, and who, before he was with DISH network, had been in the airline industry for >20 years, including stints as CFO at Northwest Airlines and at America West Airlines, both of which had BKs. I don't think he was CFO when they declared BK, but given that background, do you think the odds of a BK in the next 4 months went up or down?

Can FTR be buying it back quietly on the open market to save money, or does that violate any covenants?

I guess it depends on whether you think they are negotiating with bondholders. If they are, they probably wouldn't be buying up debt on the market.

AJ
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Just another point. You will also note that the new CEO's signon bonus is strictly cash - no options or restricted stock awards. https://seekingalpha.com/filing/4723147#EX10_1_HTM Compare that to the employment agreement of another CEO appointed about the same time for Tractor Supply (TSCO) where the new CEO gets both restricted stock units and stock options https://seekingalpha.com/filing/4728105

AJ
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Was trading at 0.51 in mid-November. Now it trades around 0.62.

And as of 1/17/20 it was back down to the .50 range. Of course, that was before.....

Other than a bankruptcy filing in the next 4 months, what other risk am I missing?

Well, turns out that the risk you thought wouldn't happen actually did....

https://www.msn.com/en-us/money/companies/frontier-tells-cre...

Company executives including Bernie Han, Frontier’s new chief executive officer, met with creditors and advisers Thursday and told them the company wants to negotiate a pre-packaged agreement before $356 million of debt payments come due March 15, the people said.

Since the market was closed today, it will be interesting to watch the action tomorrow.

AJ
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Hi AJ,

Thank you for the reply and posting the link. Looking at FINRA today, it looks like it is still trading around 0.50. Last trade reported when I checked before writing this was at 0.4925. I am sure it may slip more though.

I am guessing that this means that the market had already priced this in at the November price that I had referenced in the OP.
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....but I'll bet no one who wagered for the jayhawks to make it to the final four had last night's game priced in to the odds they accepted... :) :) :)

About 20 years ago, I was sports book in Reno, watching Kansas play. I met an older fellow, wearing a KU sweatshirt, who was enrolled at Kansas when Wilt was playing. (The fellow was there on the G.I. Bill, wanted to go into hotel management, and he told me Kansas had the ONLY masters degree program in the nation for hotel management at that time. He went on to have a great career working in Las Vegas, Tahoe, and Reno). Anyways, he had some great stories about Wilt.
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Yes, that was ugly and stupid. I am glad that Self suspended De Sousa already.
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