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It's a wake-up call - please don't hit snooze

In a previous column I wrote about gold mining companies with bond debt that didn’t seem to understand how the behaviour of those holding their bonds might change over time as the bonds changed hands from the insurers and pension funds that might have bought them originally, to distressed debt or “vulture” funds. Perhaps unkindly, I suggested that the latter might be thought to be more akin to extras from the Sopranos than the financial types that boards of mining companies were used to dealing with. The article talked to gold miners but it was relevant for all miners with bonds, big or small.

My concern had sprung up for two reasons.

The first was many miners seemed very cavalier about their debt because it was generally bullet maturities several years hence and had few covenants.