Axiom Capital Sees 'Credit Event' at SunEdison (SUNE)

Axiom Capital analyst Gordon Johnson said he is more resolute in his Sell rating on SunEdison (NYSE: SUNE) after reading the latest 10-Q. In fact, Johnson sees a credit event by 3/2/16 as likely.

The analyst cited five items:

1. Just $600M in cash available for general corp purposes

2. decision to borrow 1 year paper from Goldman Sachs at an effective rate of 15.4%, indicative of its distressed state

3. Renova's right to put back 7M shares of TerraForm Global to SUNE at $15/share.

4. SUNS liability to invest $250 million in Renova imminently

5. Possible $1.65B cash infusion to defund warehouse obligations.

Baring cheap capital, the analyst sees a credit event in the offing.

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For an analyst ratings summary and ratings history on SunEdison click here. For more ratings news on SunEdison click here.

Shares of SunEdison closed at $3.02 yesterday.

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