Getty Images Holdings Inc. (GETY) made the interest payments on its 9.75% notes due 2027 and 14% notes due 2028 on Sept. 30. The last possible day.
The payments were originally due on Sept. 1. Getty had used a 30-day grace period, a short extra window a borrower gets before a missed payment officially becomes a default.
That window was about to close.
“Because the interest payments were made within the applicable 30-day grace periods, no ‘Event of Default’ occurred under the indentures governing the Senior Unsecured Notes,” the company said in a filing with the Securities and Exchange Commission.
A Default Avoided, For Now
S&P Global Ratings had said it would cut Getty to selective default if the bondholders’ money did not arrive within the grace period. A formal default could also have allowed bondholders to demand faster repayment.
However, the payment does not fix the balance sheet. Getty ended June with $51.6 million in cash and about $2 billion of debt.
The company said it is still evaluating “strategic financing alternatives and balance sheet management initiatives.” This includes “an active and progressing dialogue with its key debt and equity holders.”
Earlier this week, Bloomberg reported that Getty was in talks with lenders about new financing, possibly through a bankruptcy loan, and about lenders taking control of the company.
Pushed Off The New York Stock Exchange
On Tuesday, the New York Stock Exchange suspended trading in Getty’s Class A shares, effective immediately, and began proceedings to delist them.
The exchange cited “abnormally low selling price” levels. The rule allows the NYSE to act right away when a stock trades at extremely low prices, without waiting for the usual cure period.
Getty can ask an NYSE Board committee to review the decision. The exchange said it will apply to the SEC to delist the shares once all procedures, including any appeal, are complete.
Getty first received a warning in March, when its share price had stayed below $1 for 30 straight trading days.
What The Market Is Saying
The shares now trade over the counter, outside a major exchange.
They closed at $0.0859 on Wednesday, up 3.6% on the day.
That price is about 37% below the $0.137 the stock traded at on Monday on the NYSE. At about 8.6 cents, the company’s equity is worth roughly $36 million, while its debt is more than 50 times larger.
Chart: GETY OTC Shares Trade At Less Than 9 Cents
