Question-and-Answer Session
Operator
(Operator Instructions)
Your first question comes from the line of Heather Jones with BB&T Capital Markets. Please proceed.
Heather Jones - BB&T Capital Market
Good morning.
Ron Miller
Good morning, Heather
Heather Jones - BB&T Capital Market
I have a couple of quick questions. One, if liquidity issues you outlined, I'm just wondering if you have an estimate of how much if you had to liquidate those today, you mentioned $1.5 million impairments so far, I mean if you had to liquidate them today do you have some kind of estimate of how much you will lose?
Ajay Sabherwal
Heather, this situation has just occurred, everyone has read about it in the journal almost on a daily basis. So, as we said, there is a significant -- if there is liquidity at all it is at a significant discount to par at this time, but this is a very volatile situation. And as we’ve said in our release, don’t believe. Now is the time for us to try and do any further liquidations at this significant discounts to par. We’ve the liquidity today, in terms of the cash and in terms of our revolver. And so, we’re going to wait till this settles down. And we believe, we have very secured AAA bonds here that should not be trading at the significant discount that they are today because of the liquidity issues. In terms of a specific quote, I would not like to do that, I mean certainly various bond desks can do this, because this is a fairly volatile and relatively illiquid situation.
Heather Jones- BB&T Capital Markets
Now you mentioned that your credit facility could be expanded to $300 million based on current conditions, what could be [explanative] based on your balance sheet today?
Ajay Sabherwal
The way it works is that it's a -- and then we have give numbers as of year end, is you take their inventory and your receivables and you put a certain percentage, I think its roughly 80% in both cases, and you get a certainly borrowing base, you add to that your $50 million of PPNE, which is amortizes quarterly for roughly seven years. So, that's your borrowing base. What that means is, say our inventory increases or the value of our inventory increases, it's not a one-for-one relationship, but it does increase the borrowing base and therefore allows us to borrow more. So, that is up to $200 million and if that inventory and receivables expands in such that the borrowing base exceeds $200 million, then subject to certain approvals, you can take this facility to $300 million as well.
- To read the full transcript on Seeking Alpha, click here »
