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Stock Market & Financial Investment News

News Breaks
June 19, 2014
12:10 EDTCOCOCorinthian Colleges warns on ability to continue as going concern
Corinthian Colleges disclosed in a regulatory filing earlier that on June 12 the company received a letter from the U.S. Department of Education that requires the company to provide additional information to the department and informed the company that it has transferred all company schools from Advance Payment to Heightened Cash Monitoring 1, effective immediately. The company said, "In the ordinary course such funds are available for drawdown by the company within 24 to 72 hours of the request. However, ED has imposed an additional stipulation delaying drawdown of the requested funds for a period of 21 days. ED’s transfer of the company’s schools from the Advance Payment method to HCM1 status, plus the imposition of the 21-day waiting period before drawing down funds, will adversely affect the timing of the company’s operating cash flows and is expected to result in a significant shortfall in the company’s operating cash flows. The company is seeking relief from ED for the 21-day waiting period required by the June Letter, but has been unsuccessful to date in its efforts to obtain such relief. If such relief is not provided, the company’s existing cash balances will be insufficient to sustain it through this transition period, and therefore the company would need to immediately obtain other sources of liquidity, which may not be available. The company has engaged in discussions with its credit facility lenders in order to obtain financing to bridge the shortfall in operating cash flows during this transition period, but the lenders have indicated they will not provide any such financing. If the company is unable to timely obtain alternate financing, the company’s cash flows will not be sufficient to meet its obligations as they become due, which would cause the company to be unable to continue as a going concern."
News For COCO From The Last 14 Days
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August 26, 2014
07:25 EDTCOCOITT Educational has negative read through from Corinthian, says Wells Fargo
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August 25, 2014
17:55 EDTCOCOCorinthian Colleges says need to obtain additional sources of liquidity
In a regulatory filing, Corinthian Colleges disclosed that the company has entered into a Consent and Amendment No. 4 to Credit Agreement, dated as of August 19, by and among the company, Everest Colleges Canada, the Guarantors party thereto, the Lenders party thereto and Bank of America, as Domestic Administrative Agent and Canadian Agent...As previously reported by the company, the company has been, and is, seeking additional sources of liquidity through, among other things, asset sales. On August 20, the company sold to an unrelated third party, on a non-recourse basis, after conducting a bid process, a portfolio of student loans for approximately $19M. The company’s decision to sell certain of its student loans which it had previously intended to hold for investment resulted in a change in the accounting treatment for such loans from “held for investment” to “held for sale.” the company concluded on August 19 that an impairment charge is required of approximately $55M to $59M. The company expects to include the impairment charge in its consolidated financial statements for the fiscal year ended June 30...Additionally, the CFPB requested certain documents relating to a recently-completed sale of student notes and certain information relating to the student loans that the company continues to hold and any private lending arrangements to which the company is currently a party...The company added that Corinthian Colleges continues to need to obtain additional sources of liquidity to fund its operations and to implement the agreements contemplated by the Operating Agreement. To do so, the company will continue to seek additional sources of liquidity through new financings, additional cost reductions, accelerated asset sales or some combination thereof. There can be no assurance that the company will be able to obtain any such additional needed liquidity on a timely basis, on terms acceptable to it, or at all. Any withholding of Title IV funds by ED, or further restrictions on funding or operations by accrediting agencies, state agencies, or other funding sources would exacerbate the company’s existing liquidity constraints.
07:23 EDTCOCOGovernment not looking to push other colleges out of business, says Wells Fargo
In the wake of Corinthian Colleges' (COCO) dissolution due to actions taken by the Department of Education, Wells Fargo thinks the government did not intend for this scenario to unfold. After speaking with unnamed "knowledgeable sources" about the issue, the firm does not expect the department to take similar actions in the future because doing so would create too much of a workload for the department, Wells believes. Publicly traded companies in the space include American Public Education (APEI), Apollo Education (APOL), Bridgepoint Education (BPI), Career Education (CECO), Corinthian Colleges (COCO), DeVry (DV), Grand Canyon (LOPE), ITT Educational (ESI) and Strayer (STRA).

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