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Refinancing your mortgage to pay down a pricey business loan

Dear Your Business Credit,
We have a business loan that was taken out when our business was doing well. With the new economy, our business is doing about a fourth of what it was. The loan is at $40,000 and a high interest rate. We have refinanced our home at a much lower interest rate and have taken out cash to clear our business debt and credit cards. Since our bank has made a lot of dollars on our business loan, I would like to know how to reduce what we pay every month with a cash payout. Is this a possibility? Thanks. — Jim

Dear Jim,
It’s smart to do your homework in a situation like this.

When I ran your question past Jeffrey M. Stibel, chairman and CEO of Dun & Bradstreet Credibility, which issues credit scores for businesses, he said that if you made a personal guarantee on the loan, then using your home equity line to pay down the business line could make sense. “Home equity lines are relatively affordable, lower risk since there is no personal guarantee, and — in this particular case — may be a good way to subsidize the business while it gets back on solid footing,” he said.

It could also help you avert the damage to your personal credit that you could potentially suffer if you can’t pay the business loan. “Business credit that is backed personally risks a personal bankruptcy,” he says.

Nat Wasserstein, a crisis manager with Lindenwood Associates in Upper Nyack, NewYork, and New York City, also agreed that refinancing your debt using your home equity line of credit could give you some breathing room. However, he says there’s a downside to tapping your home equity: “You’ll encumber personal assets for business,” he says. What happens if your business fails? You may end up with no way to bring in income and find yourself falling behind on your mortgage, which puts your house at risk.

I assume that when you say your business is doing a fourth of what it was, you are referring to sales. If that’s the case, you may have what Wasserstein calls an “upside down” balance sheet. You could have too much debt relative to the sales you’re taking in. That’s because you took out the loan at a time when you had four times more revenue.

In a scenario like this, Wasserstein recommends that entrepreneurs look for ways to get rid of the debt entirely and not just stretch it out. In an ideal scenario, you’d figure out a way to bring in a lot more money, so you could retire the loan by paying it off. That might mean coming up with a new product or service more profitable than what you are selling now — something you may need to do, anyway, if sales are a quarter of what they once were. Many businesses have had to reinvent themselves in a more digital and global economy, and brainstorming with your business advisors and mentors or a few fellow entrepreneurs that you trust could pay off. Taking a second job for a while may also help you build momentum in paying down the loan.

If those full-payback options are not possible, it’s worth considering another option: a “workout” or restructuring of the debt with your bank. Essentially, you need to alert the bank that you no longer have enough revenue to support the loan payments. This may enable you to negotiate an arrangement in which the bank forgives part of the debt so you can improve the balance sheet of your business.

Why would a bank do this? A lender would rather that you keep the business open so you can pay back some of the debt than see you go out of business, he explains. If you close your doors, the bank will likely have to liquidate the business, and will probably walk away with less money than if you keep working and make loan payments. “It’s a risk management issue for the bank,” Wasserstein says.

However, this is not easy to orchestrate if it looks like you have some other means to pay the debt. “A bank workout when a business is doing that poorly is unlikely if the individual can afford to pay the loan as is,” says Stibel. Given that the loan is for $40,000 and not, say, $1 million, the bank may not buy an argument that you can’t come up with the money somehow.

Anyone looking to do a workout would need a turnaround professional to make a strong financial case to the bank that you cannot generate the necessary sales to pay down the loan, Wasserstein says. Once the bank has that information, it is under an obligation to write down the loan, he says. “They have no choice,” he says. “They can’t lie to bank regulators when evidence is being presented to them that a loan is no good.” Once a bank writes down the loan, it is a lot easier to forgive, he says.

If you want to go this route, don’t just walk into your bank and try to negotiate the terms yourself. This is a complex negotiation, and you need a financial professional with experience in restructuring a business on your side, says Wasserstein.

As in many areas of financial services, some professionals in this area are more reputable than others. He suggests talking to a well-respected attorney in your community who handles business bankruptcies to see if he or she can recommend a good turnaround professional. The Turnaround Management Association, a nonprofit group with more than 9,000 members, is another potential source.

Having interviewed several entrepreneurs who have gone through a workout with a bank over the years, I can tell you that it was extremely stressful for many of them. The bank may play hardball. But in some cases, it may be worth enduring if you emerge with a much lower debt burden and can save your business. Good luck — and please check back in and let me know how you’re doing.

See related: Finding a free bankruptcy lawyer for business, consumer debt, If your company fails, your credit card rate can rise, Repayment, settlement, bankruptcy: Facing debt from failed business

Refinancing your mortgage to pay down a pricey business loanNo 2-in-1 card for tax-exempt organizationsDangers of putting business expenses on a personal cardFinanceDebt […]

What is Debt Financing?

When a company needs to pay for something, it can pay with cash, or it may finance the purchase. Financing means that it gets the money from other businesses or sources, in return for obligations. Companies that are short on cash may need financing to pay for short-term needs or long-term capital expenditures.

There are two kinds of financing—debt financing and equity financing.

Equity financing means the company raises money by selling ownership shares in the business.

Debt financing happens when a company gets a loan and promises to repay the loan over time, with interest. Debt financing can come from a lender’s loan or from selling bonds to the public.

Loans usually require the borrower to offer collateral to guarantee repayment. This is called a secured loan. If the borrower defaults on a secured loan, the lender can take the collateral as repayment.

Various assets may be acceptable as collateral. For example, accounts receivable, real estate, equipment, securities, mortgages, inventory and merchandise might be acceptable to the lender. Having other people or companies sign as guarantors or endorsers may also work to secure a loan.

Selling bonds or commercial paper in the capital markets is another way to raise money through debt financing. This may at times be more economical or easier than taking a bank loan.


War Eagle Receives Cash From Sale of Tres Marias Project, Mexico

VANCOUVER, BC–(Marketwired – March 03, 2015) – War Eagle Mining Company Inc. (TSX VENTURE: WAR) (“War Eagle” or the “Company”) is pleased to report that it has received a further US$300,000 (approximately Cdn$375,000) installment of the proceeds of the sale in 2014 of the Tres Marias zinc-lead-germanium project in Chihuahua, Mexico to Contratista y Operaciones Mineras SA de CV (“Comsa”), a private Mexican mining company. Total consideration for the sale was US$5,000,000 cash which is to be satisfied by (i) loan repayments totaling US$400,000 cash (now received) plus (ii) the balance in fixed periodic loan repayments totaling $2,100,000 to be received over a period to July 2016, the next such repayment to be US$600,000 in July 2015, (iii) an additional US$400,000 if sales of product are US$20 million or more, (iv) a further US$400,000 if sales of product are US$25 million or more and (v) a 2% net smelter return royalty to a maximum of a further US$2,500,000. Accordingly, total consideration could be as much as US$5,800,000.

Comsa has numerous permits in place to facilitate mine development and has significantly advanced the final permit application to enable commercial production.

This news release was prepared by management of War Eagle, which takes full responsibility for its contents. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

FinanceInvestment & Company InformationWar Eagle Contact:

For additional information please contact:

War Eagle Mining Company Inc.

Thomas R. Atkins
President and CEO

Malcolm P. Burke
604-689-1515 x 308



Cash rich lenders bankroll Japan Inc's shopping spree

Flush with cash from the Bank of Japan (Tokyo Stock Exchange: 8301.T-JP)‘s (BOJ) stimulus effort, lenders won’t be put off from financing Japan Inc’s habit of paying too much for overseas acquisitions, even as a weaker yen makes those deals more expensive, analysts say.

“The banks need someone to lend to and M&A (merger and acquisition) financing is one of the few growth areas for them,” said Barclays (London Stock Exchange: BARC-GB) bank analyst Shinichi Tamura. As long as a company “looks creditworthy enough to pay back the loan, the banks will be happy to back the deal.”

Deal volumes sank to a twelve-year low in 2014, but a recent flurry of M&A deals suggests Japanese companies are ready to shop overseas again.

Last week, Japan Post made a $5.12 billion bid for Australia’s Toll Holdings (ASX: TOL-AU). On Monday, chemicals company Asahi Kasei (Tokyo Stock Exchange: 3407.T-JP) announced it would buy U.S.-based Polypore (NYSE: PPO)‘s energy storage business for $2.2 billion. On Tuesday, Hitachi (Tokyo Stock Exchange: 6501.T-JP) announced it would buy Finmeccanica (Milan Stock Exchange: FNC-IT)‘s transportation operations for 800 million euros ($909 million).

Whether the companies pay too much for overseas acquisitions is not the banks’ problem, according to Japan Macro Advisors chief economist Takuji Okubo: “That’s the company’s problem – the banks only care about the creditworthiness of the acquirer’s parent company.”

Desperate for borrowers

Japanese banks have faced a predicament for years: despite low interest rates, they can’t find enough borrowers.

The situation took a turn for the worse after the BOJ launched an unprecedented asset purchase program in April 2013. The program involves buying government bonds – the main source of yield income in the past for banks. Yields have trended ever lower but failed to stimulate any new demand for loans.

As a result, margins on bank loans in Japan continue to skim record lows. For example, the lending rate on domestic loans at Mitsubishi UFJ Financial Group (Tokyo Stock Exchange: 8306.T-JP), one of the country’s biggest banks, slipped to 1.10 percent in the last three months of 2014, from around 1.3 percent in early 2013, before the BOJ started its massive asset purchase program.

Read More Is Japan Post overpaying for Toll?

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Flush with cash from the Bank of Japan’s stimulus effort, lenders will keep on financing Japan I …

That makes shorter M&A financing package loans that carry higher risk premiums and yields more attractive for banks, said Barclays’ Tamura. A typical loan will be rolled over into a three- to five-year syndicated loan, he said.

“The banks are desperate and are willing to take on the risks,” said Japan Macro Advisors’ Okubo.

But banks aren’t overly concerned about the risk factor.

“Private sector banks believe the loans carry implicit government guarantees” because public sector banks like Japan Bank for International Cooperation lead the M&A financing consortiums, Okubo said.

Race against time

Japanese companies may not need to worry about financing their overseas shopping sprees, but they should worry about the potential for further yen weakness, analysts said.

Prime Minister Shinzo Abe’s economic policies, dubbed Abenomics, and the BOJ’s quantitative easing efforts have weakened the yen by over 40 percent since Abe returned to power in December 2012. Many analysts expect the yen to weaken further.

“It makes sense for companies to be pre-emptive and do deals before the yen weakens anymore,” said BNP Paribas chief credit analyst Mana Nakazora.

Given strong cash balance sheets and a shrinking domestic market, that appears likely, according to PwC Corporate Finance director Gregory Bournet. He expects the number of outbound M&A deals to rise to 20 percent of all deals in fiscal 2015 from 10 percent in 2014.

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This Bizarre Russian ATM Wants to Lend You Money

Walking past a row of vending machines and ATMs at the Kursky train station in Moscow, Sergei Amirkhanov stops in front of a bright orange cash machine. Instead of inserting his bank card, he scans his passport, poses for a photo and enters his mobile number. He receives a text message on his phone a few minutes later, telling him to return to the machine and withdraw the cash he needs.

This strange kind of ATM began popping up at railway stations and shopping malls around Moscow last year. It looks like a regular cash machine, but it’s designed to accept loan applications and dole out money on the spot.

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The loan ATM is a product of Oleg Boyko, a Russian billionaire who made his fortune running slot machine halls. When President Vladimir Putin banned gambling in 2009, Boyko moved the gambling business outside the country, but he continues to control financial firms and other companies in Russia. One of his investments is 4finance Holding and its affiliate, SMS Finance, which operates the micro-loan machines. Boyko, a paraplegic who helps support the Paralympic Games, has also dabbled in Hollywood. He’s an investor in Summer Crossing, a movie based on a Truman Capote novel that will be Scarlett Johansson’s directorial debut.

There are currently about 20 automated loan machines installed throughout Moscow. They allow customers to request as much as 15,000 rubles ($241) that must be paid back in 20 days or less. The interest rate is 2 percent a day, which works out to 730 percent on an annualized basis. That may seem insane, but some Russians have been willing to embrace the technology to make ends meet between paychecks.

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Amirkhanov, 37, took out a 3,000 ruble ($48) loan after he lost his construction job at a Moscow power station in February. He needed the money to hold him and his family over while he searches for work because his bank won’t let him borrow cash. “I have a banking card, but its balance is zero,” he says. “I am in a desperate situation.” Fallout from the conflict in Ukraine has taken a toll on the Russian economy, resulting in a freeze on some construction projects and an influx of Ukrainian refugees, who are creating more competition for jobs, he says. Amirkhanov was granted 15 days to pay back the loan, including 900 rubles in interest.

For many Russians, it’s the only way to borrow. After the value of the ruble began to plummet late last year, local banks took hits to their credit ratings and were no longer able to find lenders abroad. As a result, Russian banks have less cash to lend and are tightening client-scoring procedures to avoid bad loans. Leave it to a gambling magnate to have the stomach for risky consumer loans in this economy.

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Payday lenders similar to 4finance, such as Britain’s, are often characterized as vultures feeding on the vulnerable. Typical customers have poor credit or problems with employment or are uneducated about what financial options are available to them, according to Olga Naydenova, an analyst at BCS Financial Group in Moscow. “Their rates are way too high,” she says. “While regulation has been tightening for traditional banks, the micro-finance business has much softer requirements for capital adequacy.”

The absence of strict regulation allows micro-loan companies to provide options to people who would be passed over by traditional banks, according to Kieran Donnelly, chief executive officer of Boyko-backed 4finance. The company offers consumer loans in a dozen European countries, primarily through websites people access via computers or phones. More than 11 million loan applications have been submitted to 4finance, which lent €831 million ($944 million) last year. The company, which recently spun off the Russian SMS Finance unit to appease risk-averse investors, plans to hold an initial public offering as soon as 2016, Donnelly says. “Our objectives are about profitability and return on investment,” he says. “A big part of what we are offering to people is convenience.”

Recognizing that many potential customers may not have access to the Internet or trust it with their banking information, SMS Finance began working on the ATM and installed the first ones in Moscow in May 2014. They contain software that matches a photo taken by the machine with one on a passport to verify customers’ identities, which help the company evaluate each applicant’s creditworthiness within 15 minutes. It’s still something of an experiment, but the company plans to test the ATMs in Poland and Spain next.

When a loan repayment is due, customers can settle it at a local bank, an electronics store, online, or by using a digital payment system such as Qiwi or Yandex.Money. If someone tries to skip out on paying, company representatives send e-mails, text messages, and phone calls. After two to three months of chasing a customer, they may involve debt collectors. About 10 percent of borrowers default on their loans, but the company is recovering 55 percent of overdue debt, says Donnelly. As Boyko, the investor and gaming billionaire, can probably attest, those are better odds than he’ll get at the casino.

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Why Shares of Home Loan Servicing Solutions Gapped Up

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What : Shares of Home Loan Servicing Solutions rose as much as 11% after the company announced that it has agreed to be acquired by New Residential Investment for $18.25 per share in an all-cash deal that values the company at $1.3 billion.

So what : The acquisition price represents a meager 9% premium over Friday’s closing price and is 28% below the stock’s July 2013 all-time high. Note that shares of New Residential are up almost as much as those of Home Loan Servicing today, which suggests the market believes the acquirer is capturing a significant value in the transaction.

Indeed, based on the daily price chart I’m looking at, it appears Home Loan Servicing Solutions ;shares have been trading at or above New Residential’s offer price since shortly after 10 a.m. EST. That suggests that the market might expect some (but not much) improvement on the offer.

However, the statement from Home Loan Servicing Solutions ;CEO John Van Vlack suggests that he didn’t enter negotiations with tremendous bargaining power or ambitions [my emphasis]: “I am pleased that this transaction offers our investors cash equivalent to the book value of their shares and addresses the uncertainty associated with our future financing obligations.” Getting paid book value is something to celebrate?

Now what : For investors who didn’t already own shares of Home Loan Servicing Solutions, I wouldn’t recommend buying them now — merger arbitrage (i.e., betting on the completion of announced transactions) is not an arena for individual investors. For existing shareholders, it might be worth hanging on to the shares for a couple weeks to see if a raised offer or new bidder emerges. Beyond that, it’s probably time to sell and move on the next opportunity. New Residential’s acquisition of Home Loan Servicing Solutions is expected to close in the second quarter.

Bank of America + Apple? This device makes it possible.
Apple recently recruited a secret-development “dream team” to guarantee its newest smart device was kept hidden from the public for as long as possible. ;But the secret is out , and some early viewers are claiming it’s ;destined to change everything from banking to health care. In fact, ;ABI Research ;predicts 485 million of this type of device will be sold per year. But one small company makes ;Apple’s ;gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple’s newest smart gizmo, just click here !

The article Why Shares of Home Loan Servicing Solutions Gapped Up originally appeared on

Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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Comment on After Ananda Krishnan loan, 1MDB now needs government cash by Justice Ipsofacto

The Malaysian Insider
23 February 2015

1MDB was not only helped by billionaire T. Ananda Krishnan to settle its RM2 billion debt to banks, but it may also require a cash injection of as much as RM3 billion from its owner, the Ministry? of Finance (MoF), say sources.

They say the controversial debt-laden outfit is facing a cash crunch as income from its power assets is not enough for debt servicing and it has run out of borrowing options, as shown by having to turn to a businessman for help.

Ananda provided a 15-month RM2 billion loan to enable 1MDB to settle its loan with a consortium of local banks on February 13.

Sources familiar with the matter confirmed this with The Edge Financial Daily and also expressed their surprise that 1MDB president and group executive director Arul Kanda Kandasamy had dismissed media reports about the loan from Ananda as mere speculation.

Arul had announced on February 13 that 1MDB had settled the RM2 billion owed to the consortium led by Maybank and RHB Bank Bhd which was first due on November 30, 2014. The loan was settled in time to prevent the banks from declaring a default.

Arul did not explain how it raised the money in his February 13 statement, but in an interview with Mingguan Malaysia? two days later, he said reports that AK lent the money were pure speculation.

“Ananda has never said anything about this matter. This is speculation by third parties,” Mingguan Malaysia quoted him as saying.

“I don’t know how he (Arul) can claim that (AK did not help),” says a source.

“It was a simple, clean loan (with no conditions) as AK did not want to be seen as taking advantage (by setting tough conditions).”

In reply to questions by The Edge on why he could not just come out and disclose how 1MDB raised the money, Arul said: “The facts on the (settlement of the) loan will be revealed in the appropriate forum/time i.e. our next set of accounts. To demand any different is to set a different standard for 1MDB which is not only unfair, but also ignoring our right and that of our stakeholders to legal and commercial confidentiality”.

Paying off the RM2 billion debt does not solve the problem for 1MDB, which has total debts of more than RM42 billion and annual debt servicing of RM2.31 billion and a negative cash flow of RM2.25 billion in its financial year ended March 31, 2014.

Sources say that MoF is aware of 1MDB’s cash-flow problem and knows it may have no choice but to step in with a RM3 billion injection.

But in order for that to happen, approval has to be given by the Cabinet, given the large amount of money involved and all the controversy that 1MDB has generated.

The government had on February 11 and 12 raised RM2.1 billion through two treasury bill issues that money market dealers say were unusually large amounts. Sources say the MOF could be getting the money ready should it go ahead and come to the aid of 1MDB.

The cash injection will have to be done before 1MDB’s next financial year close on March 31, 2015 – which is just five weeks away.

?Despite concerns raised by so many parties, MOF officials have always insisted that 1MDB was financially healthy and that the government only had to put in RM1 million as initial capital because the company was strong enough to borrow to fund itself.

Arul, in a February 18 press release on its strategic review, said 1MDB would stop borrowing from now.

Sources say the truth is that 1MDB can no longer go to the market to borrow – whether through bank loans or bond issues.

“The size of its debt of RM42 billion, the massive negative cash flow it has experienced in the last two years plus its struggle to pay the RM2 billion makes it difficult for any bank to lend to them,” says one banker.

“Bond investors will also shy away from any new debt it wants to issue.”

1MDB recently called off a RM8.4 billion Islamic bond that it had planned to raise cash to finance the 3B power project.

Bankers say it was cancelled because of lukewarm response. Sources say bankers have also taken note of the fact that 1MDB has had difficulties proceeding with its plan to float its power assets to raise cash. – February 23, 2015.


Rentech Secures Additional Loan Commitment of up to $63 Million from Blackstone’s GSO Capital Partners


Rentech, Inc. (RTK) announced today that GSO Capital Partners LP (GSO), the credit investment arm of Blackstone, has increased its credit facility for Rentech by up to $63 million. The majority of the proceeds from this new facility are expected to fund completion of Rentech’s Canadian wood pellet projects through positive cash flow. Rentech now estimates the cost to complete the construction of its Canadian wood pellet projects to be $125 to $130 million.

“We appreciate the support GSO Capital Partners continues to provide us, this time in the form of additional term loans,” said Keith Forman, President and CEO of Rentech. “The task at hand remains clear–to complete the construction and commissioning of, and to place into service, our new pellet facilities in Canada. This will be done in as timely and safe a manner as possible to preserve profitability for our investors. At the same time, we will continue our focus on operating our fertilizer assets profitably, safely and efficiently. We will work to simplify our capital structure and add to our liquidity in the future. Our focus on cost containment is an ongoing process and will continue to evolve, as indeed our company will evolve, over the next year.”

GSO Term Loan

The new lending commitment, in the form of a two-tranche delayed draw term loan, will be available for up to one year. One tranche of the term loan allows Rentech to borrow up to $45 million, of which Rentech has initially borrowed $25 million. The company expects the $45 million tranche to fund construction, working capital and other costs of the Atikokan and Wawa pellet projects until they generate positive cash flow. Rentech may utilize the remaining commitment, of up to $18 million, in the event of certain unplanned downtime at the East Dubuque facility, or unfavorable changes in commodity prices that affect cash distributions from Rentech Nitrogen Partners.

The term loans mature on April 9, 2019. The loans are secured by, among other things, a fixed number of units of Rentech Nitrogen owned by Rentech as well as certain other assets of Rentech and its subsidiaries. The new loan has an interest rate of LIBOR plus 900 basis points per annum, with a LIBOR floor of 1.00%. Rentech also increased the collateral securing its obligations under the preferred stock holders’ existing put option right agreements. Additional details about the terms of the financing will be provided in a Form 8-K that Rentech will file with the Securities and Exchange Commission.

Canadian Wood Pellet Projects Update

Rentech expects that the new term loan, together with its other cash resources, will be sufficient to fund its Atikokan and Wawa pellet projects until they have been commissioned and begin to generate positive cash flow. Rentech currently estimates that the cost to acquire and construct the two plants will be $125 to $130 million, up from $105 million. The majority of the increase is due to delays in construction and higher labor costs for installation of electrical and mechanical components. Rentech expects that working capital and the cost to commission the plants will add approximately $6 to $10 million to the estimated total project cost. Rentech does not expect the plants to generate positive EBITDA or cash flow for the year 2015. Annual stabilized EBITDA projected for both plants remains in line with previous guidance of C$17 to C$20 million.

The Atikokan facility is currently in the commissioning phase and is producing and selling pellets to Ontario Power Generation. Rentech expects the Atikokan facility to be operating at full capacity in six to 12 months.

The Wawa facility is nearing completion of construction. Rentech expects the facility to begin startup and commissioning in the second quarter of 2015 and to operate at full capacity within one year from the start of commissioning.

Expense Reduction Plan

Under the supervision of the Finance Committee, the company engaged an independent consulting firm to assess its cost structure. The company has taken actions to reduce its projected consolidated cash operating costs and expenses in 2015 by approximately $15 million compared to 2014. Cash selling, general and administrative (SG&A) expenses in 2015 for Rentech (excluding Rentech Nitrogen) are expected to be approximately $10 million lower than in 2014, which includes cost savings due to discontinuing energy technologies. Rentech Nitrogen expects 2015 cash operating costs and expenses to be approximately $5 million lower than in 2014, due to, among other things, cost savings from the restructuring of the Pasadena facility. The projection for 2015 reflects $3 million of nonrecurring SG&A expense due to the delayed startup of the Atikokan and Wawa plants. Rentech expects to further discuss its outlook for 2015 on March 17 when it reports results for 2014.

About Rentech, Inc.

Rentech, Inc. (RTK) owns and operates wood fibre processing, wood pellet production and nitrogen fertilizer manufacturing businesses. Rentech offers a full range of integrated wood fibre services for commercial and industrial customers around the world, including wood chipping services, operations, marketing, trading and vessel loading, through its subsidiary, Fulghum Fibres. The Company’s New England Wood Pellet subsidiary is a leading producer of bagged wood pellets for the U.S. heating market. Rentech manufactures and sells nitrogen fertilizer through its publicly-traded subsidiary, Rentech Nitrogen Partners, L.P. (RNF). Please visit and for more information.

Forward Looking Statements

This news release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 about matters such as: the estimated cost of acquiring and constructing the Atikokan and Wawa plants; working capital and startup costs of the two plants; cash flow and EBITDA projections for the plants; timelines associated with various phases of the plants, including operating at full capacity; and anticipated cost savings in 2015. These statements are based on management’s current expectations and actual results may differ materially as a result of various risks and uncertainties. Factors that could cause actual results to differ from those reflected in the forward-looking statements are set forth in Rentech’s press releases and periodic reports filed with the Securities and Exchange Commission, which are available via Rentech’s website at The forward-looking statements in this news release are made as of the date of this release and Rentech does not undertake to revise or update these forward-looking statements, except to the extent that it is required to do so under applicable law.

ConglomeratesFinanceRentech Contact: Rentech, Inc.

Julie Dawoodjee Cafarella

Vice president of Investor Relations and Communications

310-571-9800 […]

Bloomberg the Company

(Bloomberg) — Allied Nevada Gold Corp., a miner that finds itself on the wrong side of a currency swap, hired a financial adviser to negotiate with lenders as its access to cash wanes, according to three people with knowledge of the situation.

Moelis & Co., the New York-based investment bank, is set to lead talks for the Reno, Nevada-based company as it prepares to restructure $543 million of borrowings, said the people, who weren’t authorized to speak publicly.

Allied Nevada has had to draw down on its $75 million short-term loan as its liability on the swap grows while the Canadian dollar depreciates versus its U.S. counterpart, according to a Nov. 3 regulatory filing. The gold and silver miner’s swap converts Canadian dollars from a C$400 million ($319 million) bond underwritten by Scotiabank and GMP Securities LP into U.S. dollars.

Tracey Thom, a spokeswoman for Allied Nevada, didn’t return messages left for comment. Andrea Hurst, a spokeswoman for Moelis, declined to comment, as did Myra Reisler, a spokeswoman for Scotiabank in Toronto.

Debtwire reported Allied Nevada’s hiring of Moelis last month.

The troubles with its out-of-the-money currency swap have exacerbated the company’s cash-flow issues as it seeks to build out its Hycroft gold and silver mine in Nevada. Allied Nevada has just over a half month at current spending rates before it exhausts its cash on hand, according to data compiled by Bloomberg.

Currency Bet

The company began amassing what on Sept. 30 was a $36.8 million out-of-the-money swaps liability as the Canadian dollar weakened. The currency depreciated 13 percent relative to the U.S. greenback in the past six months, according to data compiled by Bloomberg.

It must post the equivalent of 22 percent of its mark-to-market liability on the swap to two banks that serve as counterparties, according to the Nov. 3 filing. It had posted $11.9 million in cash and letters of credit against its revolving loan as collateral on the $54 million liability on Sept. 30.

Allied Nevada increased the amount it posted for the swap collateral to at least $14.2 million on Nov. 30, borrowing further against the revolving loan to do so, according to a Dec. 5 statement.

Shares Drop

Allied Nevada didn’t always have to post collateral for its swap liabilities. The requirement came into force in December 2013 when two banks pulled out as lenders of its revolving loan. When they left, the security they held as lenders couldn’t be used as collateral anymore for any swap liability the company incurred.

Bank of Nova Scotia, lead underwriter of Allied Nevada’s bond, arranged the swap and took on counterparty risk as part of the bond-financing package it offered the company in May 2012, when the Canadian dollar was trading near parity with its U.S. counterpart.

Proceeds of the bond were used to fund the expansion of the company’s Hycroft Mine, according to a May 16, 2012 statement.

Allied Nevada shares plunged 11.4 percent to 93 cents at 3:32 p.m. in New York. That’s the same price the stock closed at on Dec. 9, when it sold shares and warrants at heavily discounted prices on Dec. 9 to raise $21.5 million.

The company is the most-shorted publicly traded stock among gold miners, according to data compiled by Bloomberg. Allied Nevada’s market capitalization of $117 million today compares with more than $3 billion in 2012.

Forecast Downgraded

Allied Nevada has struggled to turn a profit at Hycroft. It downgraded its gold and silver sales forecast for 2014 after encountering difficult conditions at the mine. It said Jan. 21 it expects 2015 production will be “very similar” to last year while the company focuses on improving costs and efficiencies.

The company isn’t expected to generate any meaningful free cash flow this year, Brian Quast, a Toronto-based analyst at Bank of Montreal, said in a note later that day. Quast, who had previously predicted increased gold and silver output this year, said his expectations now looked “optimistic.”

It’s also running low on funds, with just $1.3 million of cash and cash equivalents at the end of November. It could borrow just $12.8 million more on its revolving loan on Nov. 30, according to the Dec. 5 statement.

Allied Nevada is trying to arrange financing for a mill project at the Hycroft mine that would allow the company to recover more metals and boost profits at its operation. While it’s received “significant” interest, progress has been hindered by volatile markets and commodity prices, the company said in the Jan. 21 statement.

The price of gold dropped 28 percent in 2013, the first annual decline in 13 years, declined another 1.7 percent last year and remains 36 percent below the September 2011 record of $1,923.70.

To contact the reporters on this story: Laura J. Keller in New York at; Cecile Gutscher in Toronto at

To contact the editors responsible for this story: Dave Liedtka at; Shannon D. Harrington at Kenneth Pringle


Colt Defense LLC Enters into a New $33 Million Senior Secured Term Loan Facility.


Colt Defense LLC (“Colt”) announced today that it has entered into a new senior secured term loan facility with Cortland Capital Market Services LLC, as agent, and certain lender parties thereto (the “Cortland Facility”). The Cortland Facility provides for a term loan of $33 million, which includes the arrangement of certain cash collateralized letters of credit in an aggregate face amount of up to $7 million, of which approximately $5 million will be used in connection with the termination of Colt’s existing revolving credit agreement. Proceeds from the Cortland Facility will be used to repay all amounts outstanding under Colt’s existing revolving credit agreement and terminate such revolving credit agreement, for cash collateral for certain letters of credit, to pay fees incurred in connection with the consummation of the Cortland Facility and the termination of the existing revolving credit agreement, for additional liquidity and for general working capital purposes. The Cortland Facility provides for the accrual of interest at a fixed rate of 10% per annum and matures August 15, 2018. The lenders under Colt’s existing term loan agreement dated as of November 17, 2014 (the “Term Loan Agreement”) have also agreed to amendments to the Term Loan Agreement necessary for Colt to enter into the Cortland Facility.

About Colt Defense LLC

Colt is one of the world’s oldest and most renowned designers, developers and manufacturers of firearms for military, personal defense and recreational purposes. Our founder, Samuel Colt, patented the first commercially successful revolving cylinder firearm in 1836 and, in 1847, began supplying U.S. and international military customers with firearms that have set the standards of their era. The “Colt” name and trademarks stand for quality, reliability, accuracy and the assurance of customer satisfaction. Our brand and global footprint position us for long-term growth in a world market that offers continued opportunities in all of our sales channels: military, law enforcement and commercial. We operate from facilities located in West Hartford, Connecticut and Kitchener, Ontario, Canada. More information on Colt Defense LLC is available at and

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to the “safe harbor” created by those sections. Any statements about the Company’s expectations, beliefs, plans, objectives, assumptions or future events or Company’s future financial performance and/or operating performance are not statements of historical fact and reflect only the Company’s current expectations regarding these matters. These statements are often, but not always, made through the use of words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “predict,” “potential,” “estimate,” “plan” or variations of these words or similar expressions. These statements inherently involve a wide range of known and unknown uncertainties. The Company’s actual actions and results may differ materially from what is expressed or implied by these statements. Factors that could cause such a difference include, but are not limited to, those set forth as “Risk Factors” in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2013, which was filed with the Securities and Exchange Commission on September 15, 2014, as updated by the Company’s Quarterly Report on Form 10-Q/A for the quarter ended September 28, 2014, which was filed with the Securities and Exchange Commission on December 2, 2014. Given these factors, you should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance nor use historical trends to anticipate results or trends in future periods. The Company expressly disclaims any obligation or intention to provide updates to the forward-looking statements and estimates and assumptions associated with them.

FinanceInvestment & Company InformationSamuel Colt Contact:

Colt Defense LLC
Sheri Miller, 1-860-236-6311 x1505