Molycorp Senior Creditors Reportedly Submitted Restructuring Plan

According to a report from Bloomberg, Molycorp (NYSE:MCP) could be considering a proposal to restructure its $1.6 million debt. The plan would see at least some bonds owned by senior creditors swapped for equity.

As quoted in the publication:

Houlihan Lokey and Kramer Levin Naftalis & Frankel, which are advising holders of Molycorp’s $650 million of 10 percent first-lien secured notes maturing in June 2020, submitted the plan in late April and signed non-disclosure agreements, said the people, who asked not to be named because the matter is private. The proposal includes swapping a portion or all of the notes into equity, the people said.

The plan, which would cut Molycorp’s debt load and interest cost, is based on the creditor group’s expectation that the securities would be impaired in a restructuring while the company’s lower-ranking 3.25 percent convertible notes due in June 2016 would get wiped out, one of the people said. Molycorp has also been negotiating with holders of the $206.5 million in convertible notes, led by Apollo Capital Management LLC, to push out the debt’s maturity date and convert it into equity, said one of the people.

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