SunEdison could face a technical default on about $1.4 billion of its debt, TheStreet TV anchor Rhonda Schaffler reports.
NEW YORK (TheStreet) -- SunEdison (SUNE) stock is slumping by 3.15% to $1.23 in afternoon trading on Thursday, as the renewable energy company could face a technical default on $1.4 billion in loans and credit facilities if it fails to file its annual report by March 30 and doesn't reach agreements with lenders, Bloomberg reports.
SunEdison had a debt load of $11.67 billion as of the end of September.
"They have a big issue coming with their debt," Patrick Jobin, an analyst at Credit Suisse told Bloomberg. Since that hasn't happened, it's unclear if SunEdison is able to meet its obligations, he said. "We're sitting here blindfolded. I don't even know what cash-generating assets they have left."
The company took on a $725 million second-lien credit facility in January, and is consequently required to release an annual report for 2015 by March 30. If it fails to do so, SunEdison will be in default, Ian Fengan analyst at Covenant Review, told Bloomberg.
If SunEdison still doesn't address the breach within its 15-day cure period, or by April 14, it will become an "Event of Default." Lenders are then able to determine what happens next, and might grant an extension in exchange for a higher interest rate, for example.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
SunEdison's weaknesses include its generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: SUNE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.