Postmedia Bond Plunge Signals End of Godfrey's U.S. Debt 'Noose'
- U.S. currency bonds trading at just 14 cents on the dollar
- Price levels imply debt owned by Allianz to be restructured
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Postmedia Network Canada Corp. Chief Executive Officer Paul Godfrey has called his company’s U.S. dollar debt a noose around the newspaper publisher’s neck. Investors are betting he may soon escape it as a restructuring looms.
Postmedia’s $222 million of bonds, which have second place in the company’s capital structure, have fallen to 14 cents on the dollar from more than 71 cents in January, according to data from the U.S. Financial Industry Regulatory Authority’s reporting system. That price suggests the market is bracing for a debt restructuring that could force lenders including Allianz SE and Riverpark Advisors LLC to take substantial writedowns, convert the bonds to equity, or wipe their investment out altogether.