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Post by mnkdfann on Mar 17, 2020 12:36:22 GMT -5
Also, from the link I posted earlier: "These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%." No reason to think Mankind does not have access to credit elsewhere, is there? Even if not, as previously mentioned, the maximum size of the loan is apparently only $2 million. If there is drop in script numbers that cause MidCap 2nd tranche covenants to be missed and Midcap were to decline modifications, MNKD would then probably be in situation where they have no access to credit. My thinking was that they would still be able to access some credit, but perhaps at higher rates than Midcap's and from perhaps a different source. Does the Midcap arrangement preclude Mannkind from seeking credit from third parties? I'm not overly familiar with the precise details. |
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Post by ktim on Mar 17, 2020 12:44:43 GMT -5
If there is drop in script numbers that cause MidCap 2nd tranche covenants to be missed and Midcap were to decline modifications, MNKD would then probably be in situation where they have no access to credit. My thinking was that they would still be able to access some credit, but perhaps at higher rates than Midcap's and from perhaps a different source. Does the Midcap arrangement preclude Mannkind from seeking credit from third parties? I'm not overly familiar with the precise details. You think that a different source will be willing to loan as subordinate to Midcap or that Midcap will be generous and offer to be subordinate to new lender? Doesn't seem like Midcap agreement would absolutely preclude other sources of credit as long as they are subordinate. |
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Post by mnkdfann on Mar 17, 2020 13:00:39 GMT -5
My thinking was that they would still be able to access some credit, but perhaps at higher rates than Midcap's and from perhaps a different source. Does the Midcap arrangement preclude Mannkind from seeking credit from third parties? I'm not overly familiar with the precise details. You think that a different source will be willing to loan as subordinate to Midcap or that Midcap will be generous and offer to be subordinate to new lender? Doesn't seem like Midcap agreement would absolutely preclude other sources of credit as long as they are subordinate. IDK which way it would work out, I'm just trying to interpret the info at the link I gave (and assuming that info is correct). The SBA loans it describes are not available if the business has access to credit. I assume Mankind is still in good enough shape that it could get credit from somewhere, at a high enough rate, for the max. $2 million the SBA would otherwise provide. Also, the PR Mannkind released today (about refocusing and new collaborations) makes me think it isn't in bad enough shape to need one. I guess I think this thread is just sort of pointless. It seems to me the answer to the OP's question "What are the chances of MNKD securing one of those COVID-19 low interest SBA loans for maybe $50 million or $100 million?" is simply nil to none, for the several reasons I identified. |
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Post by mango on Mar 17, 2020 13:12:29 GMT -5
I bet Immix could secure a loan.
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Post by ktim on Mar 17, 2020 13:30:24 GMT -5
You think that a different source will be willing to loan as subordinate to Midcap or that Midcap will be generous and offer to be subordinate to new lender? Doesn't seem like Midcap agreement would absolutely preclude other sources of credit as long as they are subordinate. IDK which way it would work out, I'm just trying to interpret the info at the link I gave (and assuming that info is correct). The SBA loans it describes are not available if the business has access to credit. I assume Mankind is still in good enough shape that it could get credit from somewhere, at a high enough rate, for the max. $2 million the SBA would otherwise provide. Also, the PR Mannkind released today (about refocusing and new collaborations) makes me think it isn't in bad enough shape to need one. I guess I think this thread is just sort of pointless. It seems to me the answer to the OP's question "What are the chances of MNKD securing one of those COVID-19 low interest SBA loans for maybe $50 million or $100 million?" is simply nil to none, for the several reasons I identified. I think it would either require Midcap cooperation, or it would need to be unsecured loan. SBA I believe is unsecured, so that wouldn't require Midcap cooperation (most likely, unless there is some specific covenant). Would there be other sources of unsecured loans in this environment? Seems doubtful. I don't think today's announcement has anything to do with cash needs. There's no upfront money and any drug would be a long time to revenue. Though shoring up the share price might make it more likely to be able to raise cash through equity offering. I'm no expert, but practically I don't think you can do equity raise if share price is below $1 (maybe this assumption isn't correct). But I agree that in practically speaking we are tied to Midcap and either need to meet the covenants or be able to renegotiate. |
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