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Post by tbone on Jun 9, 2015 9:20:42 GMT -5
Can someone with this stuff memorized please list the requirements in order for MannKind to call it? Is it 10 consecutive days closing above 6.80, the convert price? Or is there more to it? Sorry I am being lazy by not digging up old filing. Thanks!!
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Post by ezrasfund on Jun 9, 2015 9:35:10 GMT -5
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Post by tbone on Jun 9, 2015 9:41:57 GMT -5
Oh yes, $10,20 for 20 out of 30 days. It's coming back now. I suppose MannKind won't be forcing the convert. It would be nice if we could keep $6.80+ and be rid of the debt. I guess we will know soon enough. Thanks for the response.
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Post by noonen on Jun 9, 2015 9:59:13 GMT -5
2 things happening. Convertible bonds: Bofa doesn't own them, convertible investors (bofa clients) do. As soon as stock is at or above 6.80, convertible investors can convert and be even or better. They will likely wait til August bc there is still time value in the option to convert. Would be sweet if they all converted yesterday but zero chance that happened, I believe. Those convert holders would Love to drive down the stock price to sweeten their conversion rates in any potential refinance. Hope it never comes to that. 10.20 is the magic nber for mnkd stock for mnkd to be able to call the bonds in. That has to happen 20 out of 30 days prior to notice that mnkd is calling it in. We were three days away previously from this Potential glorious day happening. Stock loan: bofa as a part of the convertible Bond deal received 9mm loaned shares at a zero percent interest rate from mnkd. When the converts are repaid, converted to stock, cease to exist, bofa has to either return the borrowed shares to mnkd or pay mnkd $55mm (that number I still haven't confirmed, it's in a prospectus for the convert somewhere). Bofa generally doesn't care where the stock of mnkd trades, unless they are considering not returning the borrowed shares and taking the risk of holding those 9 million shares and having to sell in the market. . If it stays around 7 I gotta think they'd take the risk of paying mnkd $55mm (nice cash boost for the good guys) and selling the shares. If today's price holds, and the $55mm is correct ($6.11 breakdown for bofa), bofa would stand to make around $8mm. Nice. |
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Post by papihoyos on Jun 9, 2015 11:19:47 GMT -5
I don't believe it's a either or, they need to return the 9 million share 45 days from August 15th.
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Post by noonen on Jun 9, 2015 13:22:46 GMT -5
I don't believe it's a either or, they need to return the 9 million share 45 days from August 15th. just had to make me go look at the old prospectus. ha! good thing actually. www.sec.gov/Archives/edgar/data/899460/000095012310079200/v57050bbe424b5.htmpage s-36 "The share loan under the share lending agreement will terminate and the borrowed shares (or identical shares or, in certain circumstances, the cash value thereof) must be returned to us on or about the 45th business day following the date on which the entire principal amount of the convertible notes ceases to be outstanding, subject to extension under certain circumstances, as well as under the following circumstances:"so it looks like it's only certain times mnkd can receive cash instead of the shares back (I'm assuming change of control, buyout, etc). The $55MM number was some revisionist history on my part and not accurate. the $5.55/share price morphed into a bofa option to pay $55mm instead of returning shares. apologies. But I wanted that to be true. The 9mm shares of stock were offered at $5.55 by Merrill (Bofa) to set up the short sales of stock by the convertible note holders as a part of that convertible bond offering. |
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Post by sr71 on Jul 3, 2015 11:14:04 GMT -5
Why shouldn't Mannkind simply pay-off the $100M convertible notes using available proceeds from the milestone payments?
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Post by EveningOfTheDay on Jul 3, 2015 15:38:41 GMT -5
Why shouldn't Mannkind simply pay-off the $100M convertible notes using available proceeds from the milestone payments? I guess they could, but in my opinion that would not be the smartest use of reserves at this point, especially considering they have other available options. |
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Post by compound26 on Jul 3, 2015 15:53:07 GMT -5
Why shouldn't Mannkind simply pay-off the $100M convertible notes using available proceeds from the milestone payments? It will take some time for Mannkind to be profitable. They need to have sufficient cash reserves to cover their operating expenses (including their ongoing researches on the Technosphere projects). Imagine your just started your law/medical school and have taken a $100,000 student loan to pay your tuition and living expenses. The loan will be sufficient to cover your next three/fours of study. You have drawn 100% of the loan and deposited the funds in your bank account. Now you have a large cash deposit in your bank account and you are able to pay off the loan with the money in your bank account. Should you take the cash deposit out of the bank account and pay off the loan? You do not. With the loan, you can stop worrying about money during your law/medical school years. Once you graduate, you find a good position (and therefore become profitable, so to speak), you will pay off the loan easily. At that time, you find that the loan is a smart investment, with a very high return (to you). |
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Post by dreamboatcruise on Jul 3, 2015 16:43:06 GMT -5
Why shouldn't Mannkind simply pay-off the $100M convertible notes using available proceeds from the milestone payments? It will take some time for Mannkind to be profitable. They need to have sufficient cash reserves to cover their operating expenses (including their ongoing researches on the Technosphere projects). Imagine your just started your law/medical school and have taken a $100,000 student loan to pay your tuition and living expenses. The loan will be sufficient to cover your next three/fours of study. You have drawn 100% of the loan and deposited the funds in your bank account. Now you have a large cash deposit in your bank account and you are able to pay off the loan with the money in your bank account. Should you take the cash deposit out of the bank account and pay off the loan? You do not. With the loan, you can stop worrying about money during your law/medical school years. Once you graduate, you find a good position (and therefore become profitable, so to speak), you will pay off the loan easily. At that time, you find that the loan is a smart investment, with a very high return (to you). Hopefully Matt doesn't spend it all on wild weekends in Mexico... you know those college kids. |
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Post by mannmade on Jul 3, 2015 18:18:22 GMT -5
Why shouldn't Mannkind simply pay-off the $100M convertible notes using available proceeds from the milestone payments? I guess they could, but in my opinion that would not be the smartest use of reserves at this point, especially considering they have other available options. Actually I m not sure they can until it is booked as revenue. Rt now it is my understanding that since there is a very remote chance (imho) that the milestone payments may have ti be returned should Sanofi exercise it's opt out clause that they cannot spend the cash or at least will not until no longer a potential fiscal liability. |
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Post by EveningOfTheDay on Jul 3, 2015 19:44:53 GMT -5
I guess they could, but in my opinion that would not be the smartest use of reserves at this point, especially considering they have other available options. Actually I m not sure they can until it is booked as revenue. Rt now it is my understanding that since there is a very remote chance (imho) that the milestone payments may have ti be returned should Sanofi exercise it's opt out clause that they cannot spend the cash or at least will not until no longer a potential fiscal liability. Yes, I agree with you that it would not be wise for MNKD to actually spend that cash, but I still think that through some accounting magic it would be easy for them to do it if they actually had an interest on it. My point was that it would be very unwise to do so at this stage of the company. As a shareholder I understand, even if I disagree, claims that the company should be doing more to boost the SP. I also think that while it is debatable that any of the often proposed solutions that come up in this and other boards from time to time would strengthen the SP, it is likely that putting them into practice would weaken the company on the mid/long term. I have nothing against instant gratification, unless that is, it erodes a much larger long term positive perspective. Incidentally I also agree with you that the chance of MNKD having to return that cash to SNY is simply nil. |
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Post by anims515 on Jul 4, 2015 15:55:23 GMT -5
As long as they have the ability to pay it off, they will be able to negotiate better terms on the new rolled over loan that will probably come out of it. The bank(s) won't have nearly as much leverage if they know they cannot force MNKD into unfavorable terms. Who knows if they have a deal with Sanofi to fast track a milestone payment should they have to use it for the loan.
Ideally, Sanofi buys into the company which then pays off the debt, but most likely it will be rolled over. How much of the 100mil staying lent, and at what terms, depends on how much MNKD needs the money and since so much of the Sanofi deal is private we really can't be sure how much of which funds they can touch at what time.
I have confidence Sanofi won't let MNKD hit a wall as soon as DTC ramps up even if dropping the deal in January was realistically on the table. It won't look good for them if theyre letting partners struggle this early in a relationship over a very small debt (at least by Sanofi standards).
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Post by mannmade on Jul 4, 2015 16:01:44 GMT -5
And let's not forget about Al Mann who coincidently just sold some real estate he owned for around 100m. If he had too I am fairly certain he would help solve issue at this point.
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Post by notamnkdmillionaire on Jul 4, 2015 16:59:56 GMT -5
And let's not forget about Al Mann who coincidently just sold some real estate he owned for around 100m. If he had too I am fairly certain he would help solve issue at this point. Do you really think Al will use the money from his sold property, revenue he most likely will have to pay tax on, to pay off the note? I don't think so. |
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