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May 15, 2008


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A) If only FICOs were as easily manipulated as S&P ratings! Heck, FICO doesn't even put me on "credit watch" when i don't pay my bills; wtf is up with that!

B) I think the senate banking committee should go after S&P if Claire's goes bust, because, you know, they totally knew! Round up Barney!

Lee D

Firstly, excellent choice of graphic.

Secondly, Claire's stores are grotesque. They make dollar stores look like Holt Renfrew. They must be choking on at least a decade's worth of unsold hair clips and lip gloss. Small wonder they don't have to cash to cover their debt issue.

Johnny Debacle

But the PIK toggle features allows them more flexibility to potentially avoid a default, which is what ratings purport to measure. And for the lenders at the top of the capital structure, the PIK toggle is a boon. S&P probably should be bee downgrading them because their credit statistics have materially weakened, but the PIK toggle election is likely a slight positive from a ratings standpoint. Obviously their liquidity and fixed charge coverage look a lot better now....


All good points in-kind (ha! get it? in-kind?)...

Debacle brings up a good point which I believe Mr. Juggles pointed out earlier this week, re: GM's liquidity. Sure everything looks rosy, for now...


A) Anal_yst: did you see my comment on the gm story?
B) PIK toggles are great, until you can't issue more debt using them...then you're fucked.

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