PCG - Buy, Sell or Hold

Today it was made evident that PCG secured a $5.5B DIP Financing from JPM, BoA, Citi and Barclays... I was under the impression this meant chapter 11 was a done deal.. but the stock price (+12.5% at time of writing) indicates otherwise. Might there be any restructuring experts who can share some knowledge on the correlation, if any, between DIP financing deals and BK? Would love to learn, thank you

 

I am by no means an expert, but to my understanding the $5.5bn DIP loan is to essentially keep them afloat and provide them with enough liquidity to get them through the bankruptcy process that’s expected to last 2 years. So chapter 11 is still pretty much a done deal. Like the above commenter said, I’d short the stock and buy the debt. Again, not an expert, but as they go through chp 11/ liquidation there could be some added value for the senior secured notes assuming the firms assets are still worth something.

 

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