Investors Grill Salton’s Refi Prospects
Distressed investors are skeptical of Salton Inc.'s ability to refinance its bond issue that expires this December, which it must do in order to avoid defaulting.
Distressed investors are skeptical of Salton Inc.’s ability to refinance its bond issue that expires this December, which it must do in order to avoid defaulting. Despite concerns about the maker of George Foreman grills’ ability to refinance, its bonds have soared in recent weeks on expectations such a refinancing will take place and held their ground last week despite poor earnings. Salton’s 10 3/4s of ’05 traded around 88 toward the end of last week, or 10 points above its 12 1/4s of ’08, indicating the market is placing a premium on the ’05s because buyers believe they will be refinanced.
Yet one distressed investor said though the market is all too willing to finance triple-C paper, there is very little chance the company will be able to avoid defaulting, based on the fourth quarter earnings, which revealed a decline in sales. William Rue, president, did not return a call by press time.