It would appear that Pinetree has been using margin to increase his position in a few stocks. He must feel pretty confident about the future share price of one of his holdings to go out on a limb like this.
Pinetree Capital breaches another debt covenant
2014-12-02 16:26 ET - News Release
Mr. Sheldon Inwentash reports
PINETREE CAPITAL ANNOUNCES STATUS OF CONVERTIBLE DEBENTURE DEBT INCURRENCE COVENANT
Pinetree Capital Ltd. is not in compliance with another of the debt covenants contained in the convertible debenture indenture dated May 17, 2011, as supplemented by the first supplemental indenture dated Dec. 11, 2012, and the second supplemental indenture dated Sept. 12, 2013, in each case, between the company and Equity Financial Trust Company, as trustee, which govern Pinetree's 10-per-cent convertible unsecured subordinated debentures due May 31, 2016.
The debt covenant at issue prohibits the company from incurring any additional debt if, after giving effect thereto, the aggregate amount of all of the company's debt would exceed 33 per cent of the total value of its assets, as reflected on its (unaudited) consolidated balance sheet as at the last day of the immediately preceding month. As Pinetree previously disclosed in November, the company was noted in default by the trustee under the indenture because its debt-to-assets ratio on Oct. 31, 2014, was 38.8 per cent, contrary to the 33-per-cent debt maintenance covenant contained in the indenture. At the end of November, Pinetree incurred additional indebtedness of $3.3-million in the form of margin borrowings, contrary to the incurrence covenant. The borrowed funds were used for working capital purposes, including the semi-annual interest payment due on the debentures.
The company anticipates repaying the additional indebtedness prior to the calendar year-end
