First good idea

[craigthedeac]

what's been going on with DSUP these last few days? it's down like 1.50

[ahnuld]

EW YORK - Standard & Poor's Ratings Services withdrew its ratings on Wednesday for two credit facilities postponed by Dayton Superior Corp., which makes concrete construction products and forming and shoring equipment.

The ratings service said Dayton delayed the planned refinancing due to market conditions.

Dayton shares dropped 50 cents, or 4 percent, to $11.90 in afternoon trading. The stock has traded between $9.90 and $14.49 since the Dayton, Ohio-based company's initial public offering in December.

Standard & Poor's had assigned a "B" rating and "4" recovery rating to the proposed $195 million senior secured first-lien credit facility. It had issued a "CCC+" rating and "6" recovery rating for the proposed $85 million second-lien facility.

As a result of the withdrawal, Dayton's 10.75 percent senior second secured notes due 2008, 13 percent senior subordinated notes due 2009 and $130 million revolving credit facility will remain in place.
Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[mtgordon]

Investing Moron Here

Was this foreseen or no? If so I would think this would be a great time because you can get in for a price close to what SM and krishan got in at.

[ski]

[ QUOTE ]
EW YORK - Standard & Poor's Ratings Services withdrew its ratings on Wednesday for two credit facilities postponed by Dayton Superior Corp., which makes concrete construction products and forming and shoring equipment.

The ratings service said Dayton delayed the planned refinancing due to market conditions.

Dayton shares dropped 50 cents, or 4 percent, to $11.90 in afternoon trading. The stock has traded between $9.90 and $14.49 since the Dayton, Ohio-based company's initial public offering in December.

Standard & Poor's had assigned a "B" rating and "4" recovery rating to the proposed $195 million senior secured first-lien credit facility. It had issued a "CCC+" rating and "6" recovery rating for the proposed $85 million second-lien facility.

As a result of the withdrawal, Dayton's 10.75 percent senior second secured notes due 2008, 13 percent senior subordinated notes due 2009 and $130 million revolving credit facility will remain in place.
Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[/ QUOTE ]

Again I'm a noob at this but doesn't this seem like a good time to buy more? This seems like an entirely temporary setback. I guess by not refinancing now the corporation is losing a bit of money, but I can't see it being enough to justify the drop today.

?

[craigthedeac]

i'm pretty new at this too, but perhaps since the news that they are delaying refinancing, it would be best to wait and see how low the stock goes and try to buy it at the bottom.

i am considering buying some more at a much cheaper price, especially if SM/Krishan chime in and still like it.

[krishan]

[ QUOTE ]
Investing Moron Here

Was this foreseen or no? If so I would think this would be a great time because you can get in for a price close to what SM and krishan got in at.

[/ QUOTE ]

Well part of why we liked it was we thought they could get a better rate on their debt than was expected by analysts. The credit environment has move against us fast in the past few months.

Analysts were expecting 2-300 bp improvement from 11.8. Judging from the article they walked away from a weighted 9% which is 280 bp. That is the upper range of analyst expectations and they didn't take it.

I think that means they believe they can get a favorable rate (I have not talked with SM about this) but until they actually ink a deal, there is a lot of variability about that aspect of the story. I assume it's possible the credit environment continues to worsen and the are forced to refi at a rate worse than 9%.

I think this is main concern at this point. Whether the drop from 14-12 is justified is harder to figure out. That said, there are other aspects of the company we still feel good about.

Krishan

[Scorpion Man]

Hey guys. Been travelling for past 10 days. I make no commitment to updating DSUP, but I will add some things here.

The key question on the pulled financing is, "Did they do it from weakness or from strength?" I believe, strongly, that it was from strength. They were offered 9% which is at least as good as the street was expecting. They likely walked for technical reasons around covenants (this is a financial flexibility issue) and secondarily because they think they can do even better on the rate. The lenders played a game of chicken and DSUP said F*** you. You dont do that when you are in trouble...you take the $ and run.

This does expose them to some interest rate risk (but that is just risk in the volatility sense...could get better, too).

Second issue is the second quarter results. Two analysts cut numbers in the last few weeks. This, for me, was the bigger issue than the debt being pulled (which does not concern me). Without going into all the reason I might think this..I am really not sure about Q2. The company does not provide guidance. Analysts are all over the place as a result. The business is very seasonal. So...I think business is fine. I think the company is meeting its plan. What I don't know is how their Q2 plan compares to street estimates...i.e. my long term thesis is very intact, I am not a seller (i would be a buyer if i had room, but i dont) but I am not certain whether the right trade is pre or post the quarter. I think the tone on the conf call with be positive and I think the results for the rest of the year will be good. I measure DSUP over 12 months+.

[Mr. Now]

http://www.paulekman.com/

"The Ekman Group - pioneers in research on emotions and deception - provides training programs that help individuals and groups better understand emotions and become more effective at distinguishing truth and lies."

[icetonez]

After hours celebratory bump

[ahnuld]

[ QUOTE ]
After hours celebratory bump

[/ QUOTE ]

been drinking, cant go over the earnings report, but good news?