Nixon Pardons Nu Skin
Richard M. Nixon did many amazing things inwards his life.
He hung out alongside Elvis:
He hung out alongside Mao Zedong:
But yesteryear far the most amazing thing he has done is rising from the dead in addition to teach a project at JPMorgan Chase Bank.
You mightiness intend I am kidding, only Richard Milhouse Nixon as Saint Lazarus of Bethany is a thought/nightmare interrupting my sleep.
====
Attached to the concluding Nu Skin 10-Q were several contracts for Nu Skin's debt facilities.
This is a link to the 5th amendment to the JPMorgan Chase debt facility dated v May 2014.
And hither is the signature block for JPMorgan Chase's signature.
The facility is signed yesteryear Richard M. Nixon on behalf of JPMorgan - the same yell including middle initial equally the (presumably) deceased President of the United States.
I was surprised.
I did a total text search of the SEC database for whatever other persons named "Richard M. Nixon" in addition to I exclusively flora references to the sometime President.
I searched LinkedIn - in addition to whilst in that location are many people alongside the same yell equally the sometime President none I could notice plant for JPMorgan.
I rang JPMorgan Chase in addition to asked whether they had a staff fellow member called Richard Nixon in addition to was informed they did not. I asked for that inwards writing.
I received an electronic mail maxim that they did possess got someone who worked at JPMorgan called Richard Nixon (but they had no reference to the middle initial). However they noted he would non possess got signed the document equally he did non possess got the authority.
I asked JPMorgan to seat this inwards writing only they would not, notwithstanding I rang other people inwards the depository fiscal establishment in addition to received the same answer.
When you lot band the switch it turns out in that location is a Richard Nixon inwards their internal telephone volume alongside no telephone number in addition to no initial. He is non an employee of the bank, only rather a consultant paid yesteryear an external party. They would non tell me which external party. They said categorically that he was non entitled to sign for the bank.
They did tell me he was based inwards Texas - which makes him an unlikely mortal to sign for a Utah Company nether New York law. Moreover Richard Nixon does non possess got an internal electronic mail at JPMorgan. Quote them: he is a ghost.
There may - despite my concerted in addition to failed efforts to notice them - live on a mortal called Richard M. Nixon who is authorized to sign for in addition to did sign for JPMorgan - only much seek has got me nowhere.
One choice notwithstanding is unthinkable. It is that Nu Skin has been hawking imitation documents which modify their debt covenants - maybe hence they tin brand undisclosed borrowings reverse to their debt covenants.
Either "Richard M. Nixon" is a existent mortal who has signed a unmarried SEC document for Nu Skin or Nu Skin's CFO (the other signature on the document) has some explaining to do.
The unusual signature block
It is hence comically unlikely that Tricky Dick has been resurrected equally a depository fiscal establishment underwriter, that I would naturally lean towards the beingness of some Richard M. Nixon working somewhere inwards the giant establishment that is JPMorgan.
There is 1 little particular which leans you lot towards nastier interpretations. In the signature block JPMORGAN CHASE BANK is acting equally "Administrative Agents in addition to equally a Lender". The discussion "Agents" has an "s".
The phrase "Administrative Agent in addition to equally a Lender" where Agent is inwards the singular [no "s"] is a mutual phrase inwards the SEC database. Other than this filing the phrase "Administrative Agents in addition to equally a Lender" does non appear anywhere inwards the SEC database or for that matter anywhere inwards the Google database. It is similar in that location is a one-off typo inwards this document to teach alongside the rather unusual name. Everywhere else inwards the same document the spurious "s" is absent.
I would similar a confirm/denial from JPMorgan inwards writing equally to whether Richard Nixon truly signed this document on behalf of the bank. I hope I volition post it equally before long equally received.
The covenants matter
That Richard Nixon signed the covenant modification for Nu Skin is rattling convenient for Nu Skin because Nu Skin has been inwards breach of their loan covenants (at to the lowest degree pre-modifications) since the halt of the showtime quarter of this year. They possess got notwithstanding managed to teach modifications.
They breached their covenants in addition to received what looks to live on an (ex) Presidential Pardon.
Linked is a public google sheet of Nuskin's cash flow statement, quarterly since fourth dimension immemorial. The information is courtesy the indispensable CapitalIQ.
He hung out alongside Elvis:
He hung out alongside Mao Zedong:
But yesteryear far the most amazing thing he has done is rising from the dead in addition to teach a project at JPMorgan Chase Bank.
You mightiness intend I am kidding, only Richard Milhouse Nixon as Saint Lazarus of Bethany is a thought/nightmare interrupting my sleep.
====
Attached to the concluding Nu Skin 10-Q were several contracts for Nu Skin's debt facilities.
This is a link to the 5th amendment to the JPMorgan Chase debt facility dated v May 2014.
And hither is the signature block for JPMorgan Chase's signature.
JPMORGAN CHASE BANK, N.A., as
Administrative Agents in addition to equally a Lender
By: Richard M. Nixon
Title: Senior Underwriter
I was surprised.
I did a total text search of the SEC database for whatever other persons named "Richard M. Nixon" in addition to I exclusively flora references to the sometime President.
I searched LinkedIn - in addition to whilst in that location are many people alongside the same yell equally the sometime President none I could notice plant for JPMorgan.
I rang JPMorgan Chase in addition to asked whether they had a staff fellow member called Richard Nixon in addition to was informed they did not. I asked for that inwards writing.
I received an electronic mail maxim that they did possess got someone who worked at JPMorgan called Richard Nixon (but they had no reference to the middle initial). However they noted he would non possess got signed the document equally he did non possess got the authority.
I asked JPMorgan to seat this inwards writing only they would not, notwithstanding I rang other people inwards the depository fiscal establishment in addition to received the same answer.
When you lot band the switch it turns out in that location is a Richard Nixon inwards their internal telephone volume alongside no telephone number in addition to no initial. He is non an employee of the bank, only rather a consultant paid yesteryear an external party. They would non tell me which external party. They said categorically that he was non entitled to sign for the bank.
They did tell me he was based inwards Texas - which makes him an unlikely mortal to sign for a Utah Company nether New York law. Moreover Richard Nixon does non possess got an internal electronic mail at JPMorgan. Quote them: he is a ghost.
There may - despite my concerted in addition to failed efforts to notice them - live on a mortal called Richard M. Nixon who is authorized to sign for in addition to did sign for JPMorgan - only much seek has got me nowhere.
One choice notwithstanding is unthinkable. It is that Nu Skin has been hawking imitation documents which modify their debt covenants - maybe hence they tin brand undisclosed borrowings reverse to their debt covenants.
Either "Richard M. Nixon" is a existent mortal who has signed a unmarried SEC document for Nu Skin or Nu Skin's CFO (the other signature on the document) has some explaining to do.
The unusual signature block
It is hence comically unlikely that Tricky Dick has been resurrected equally a depository fiscal establishment underwriter, that I would naturally lean towards the beingness of some Richard M. Nixon working somewhere inwards the giant establishment that is JPMorgan.
There is 1 little particular which leans you lot towards nastier interpretations. In the signature block JPMORGAN CHASE BANK is acting equally "Administrative Agents in addition to equally a Lender". The discussion "Agents" has an "s".
The phrase "Administrative Agent in addition to equally a Lender" where Agent is inwards the singular [no "s"] is a mutual phrase inwards the SEC database. Other than this filing the phrase "Administrative Agents in addition to equally a Lender" does non appear anywhere inwards the SEC database or for that matter anywhere inwards the Google database. It is similar in that location is a one-off typo inwards this document to teach alongside the rather unusual name. Everywhere else inwards the same document the spurious "s" is absent.
I would similar a confirm/denial from JPMorgan inwards writing equally to whether Richard Nixon truly signed this document on behalf of the bank. I hope I volition post it equally before long equally received.
The covenants matter
That Richard Nixon signed the covenant modification for Nu Skin is rattling convenient for Nu Skin because Nu Skin has been inwards breach of their loan covenants (at to the lowest degree pre-modifications) since the halt of the showtime quarter of this year. They possess got notwithstanding managed to teach modifications.
They breached their covenants in addition to received what looks to live on an (ex) Presidential Pardon.
Linked is a public google sheet of Nuskin's cash flow statement, quarterly since fourth dimension immemorial. The information is courtesy the indispensable CapitalIQ.
I possess got given you lot this spreadsheet because it is required to move out the debt covenants. There are many covenants (eg restrictions on related political party transactions, restrictions on types of finance lease, limitations on amounts that may live on borrowed yesteryear unusual subsidiaries).
The primal covenant is subject on cash flow from operations less working capital alphabetic lineament expenditures. And they possess got breached that covenant.
To quote the 10-Q (which in 1 trial again mentions the JPMorgan Chase loan):
On the spreadsheet I possess got done the calculation of whether they breached the debt covenant 2 ways. One means is looking at buy-backs of shares cyberspace of shares issued (which seems reasonable only is reverse to the words of the coveant). The other is the covenant equally written.
It doesn't thing which means you lot expect at it. They breached the covenant inwards the showtime quarter. This is disclosed inwards the first-quarter 10-Q.
They amended this breach later on quarter halt (which it seems required the signature of Richard M. Nixon).
You volition annotation notwithstanding the wording of the amended covenant changed betwixt the showtime quarter filing in addition to the instant quarter filing. This is pursuant to to a greater extent than modifications of covenants dated 8 August equally described higher upwards (and repeated here):
Strangely they breached that covenant likewise (as demonstrated inwards the attached Google sheet).
This restricted them from paying dividends (and presumably also led to default debt acceleration).
Dividend delays
The instant page of the spreadsheet contains the dividend announcement, ex in addition to payment appointment since 2001. That information is courtesy Nasdaq's website.
The primal covenant is subject on cash flow from operations less working capital alphabetic lineament expenditures. And they possess got breached that covenant.
To quote the 10-Q (which in 1 trial again mentions the JPMorgan Chase loan):
As of June 30, 2014, the Company was inwards violation of its restricted payments covenant nether its amended in addition to restated annotation purchase in addition to individual shelf agreement (multi-currency), dated equally of May 25, 2012, amid the Company, Prudential Investment Management, Inc. in addition to for sure other purchasers, equally amended (the "Prudential Agreement") in addition to the amended in addition to restated credit agreement, dated equally of May 25, 2012, amid the Company, diverse fiscal institutions, in addition to JPMorgan Chase Bank, N.A. equally administrative agent (the "JPMC Agreement"), which restricts the Company from making dividend payments or stock repurchases to the extent the aggregate amount of such payments overstep $100 meg plus the cumulative cash flow from operations less working capital alphabetic lineament investments since June 30, 2012. Effective August 8, 2014, the Company entered into an amendment of the Prudential Agreement that allows the aggregate amount of restricted payments to overstep the allowed threshold yesteryear no to a greater extent than than $110 meg for the quarter ending June 30, 2014 in addition to $50 meg for the quarter ending September 30, 2014, to avoid default or acceleration provisions of the Prudential Agreement. The JPMC Agreement expired pursuant to its price on August 8, 2014, prior to which all amounts outstanding thereunder were repaid inwards full.
It doesn't thing which means you lot expect at it. They breached the covenant inwards the showtime quarter. This is disclosed inwards the first-quarter 10-Q.
As of March 31, 2014, the Company was inwards violation of its restricted payments covenant nether its amended in addition to restated credit agreement, dated equally of May 25, 2012, amid the Company, diverse fiscal institutions, in addition to JPMorgan Chase Bank, N.A. equally administrative agent, equally amended (the "JPMC Agreement") in addition to its amended in addition to restated annotation purchase in addition to individual shelf understanding (multi-currency), dated equally of May 25, 2012, amid the Company, Prudential Investment Management, Inc. in addition to for sure other purchasers, equally amended (the "Prudential Agreement"), which restricts the Company from making dividend payments or stock repurchases to the extent the aggregate amount of such payments overstep $100 meg plus the cumulative cash flow from operations less working capital alphabetic lineament investments since June 30, 2012. Effective May 6, 2014, the Company entered into amendments of the JPMC Agreement in addition to the Prudential Agreement that allow the aggregate amount of restricted payments to overstep the allowed threshold yesteryear no to a greater extent than than $50 meg for the quarter ending March 31, 2014, $100 meg for the quarter ending June 30, 2014 in addition to $50 meg for the quarter ending September 30, 2014, to avoid default or acceleration provisions of these agreements. The amendment of the JPMC Agreement also fixed the applicable involvement charge per unit of measurement at LIBOR plus 0.75%, increased the commitment fee to 0.25% in addition to extended the term of the understanding from May 9, 2014 to August 8, 2014, alongside $15 meg reductions inwards the commitment amount on June 30, 2014 in addition to July 31, 2014.
They amended this breach later on quarter halt (which it seems required the signature of Richard M. Nixon).
You volition annotation notwithstanding the wording of the amended covenant changed betwixt the showtime quarter filing in addition to the instant quarter filing. This is pursuant to to a greater extent than modifications of covenants dated 8 August equally described higher upwards (and repeated here):
Effective August 8, 2014, the Company entered into an amendment of the Prudential Agreement that allows the aggregate amount of restricted payments to overstep the allowed threshold yesteryear no to a greater extent than than $110 meg for the quarter ending June 30, 2014 in addition to $50 meg for the quarter ending September 30, 2014
Strangely they breached that covenant likewise (as demonstrated inwards the attached Google sheet).
This restricted them from paying dividends (and presumably also led to default debt acceleration).
Dividend delays
The instant page of the spreadsheet contains the dividend announcement, ex in addition to payment appointment since 2001. That information is courtesy Nasdaq's website.
These are quarterly dividends. They went "ex" a dividend inwards August of every yr since 2005 except this year.
This yr they are going "ex" the dividend inwards September. The proclamation was similarly delayed.
The argue they delayed the dividend was that they were inwards breach of their loan covenants. The twenty-four hr menses later on the dividend was announced they announced yet some other loan amendment. This 1 was on the Bank of America understanding in addition to unfortunately nosotros cannot meet who signed on behalf of BofA.
The understanding extends the term from September to December.
Cash scramble
Nu Skin's residuum canvas shows $234 meg of cash, equivalents in addition to electrical current investments. Most of that cash is offshore (see the 10-Q).
The CFO states inwards the conference call that in that location is no difficulty repatriating this unusual money. To quote:
However the society has been borrowing fairly aggressively offshore. This disclosure from the Q is interesting (and involves borrowing upwards to the limits of covenants).
Meeting covenants inwards the 3rd quarter
The covenants require that they teach the "aggregate amount of restricted payments" to overstep the defined cash flow amount yesteryear less than $50 meg yesteryear the halt of the 3rd quarter.
This requires something similar $150 meg of cyberspace cash generation in this quarter. This would live on inconsistent alongside the guidance only is inside the hit that they generated inwards the concluding 2 quarters of 2013.
It seems unlikely to me that the society is going to overstep its guidance yesteryear such a massive amount inwards this quarter.
But miracles happen. After all - fifty-fifty alongside all his bad karma Richard M. Nixon seems to possess got been reincarnated equally an accommodating only hard to accomplish banker at JPMorgan Chase.
John
PS. Ford pardoned Nixon on Sep 8, 1974, most just forty years ago. It is proficient to possess got this occasion to remember.
======================
Post script:
I am barely awake (early forenoon inwards Sydney) only the society has issue a brief SEC filing inwards response to this spider web log post. To quote:
I am intrigued equally to how the typo arose. I possess got non had fourth dimension to confirm or deny that the document was signed yesteryear Richard Hixson only I would live on surprised if it were not. There is press focus on the outcome now.
I possess got flora a Richard Hixson of appropriate rank at JPMorgan - notwithstanding he plant inwards information technology hence is non truly a candidate. But JPM is a large place. There is also a George Bush there...
There is no reference (other than this filing) inwards the SEC database to "Richard M. Hixson" in addition to no reference at all to "Richard Hixson". I possess got non yet tried all the other spellings.
This yr they are going "ex" the dividend inwards September. The proclamation was similarly delayed.
The argue they delayed the dividend was that they were inwards breach of their loan covenants. The twenty-four hr menses later on the dividend was announced they announced yet some other loan amendment. This 1 was on the Bank of America understanding in addition to unfortunately nosotros cannot meet who signed on behalf of BofA.
The understanding extends the term from September to December.
Cash scramble
Nu Skin's residuum canvas shows $234 meg of cash, equivalents in addition to electrical current investments. Most of that cash is offshore (see the 10-Q).
The CFO states inwards the conference call that in that location is no difficulty repatriating this unusual money. To quote:
Yes, to a greater extent than ofttimes than non our cash is fully available, alongside the exception of Venezuela. There are some timing issues throughout some of our markets inwards Asia where you lot declare a dividend in addition to and hence you lot tin remit the dividend dorsum to corporate headquarters. But fifty-fifty inwards -- peculiarly our larger markets similar China, nosotros tin teach coin out through back-to-back loans. So yes, it truly is non a cash issue,having the cash tied upwards overseas.Okay - hence nosotros should non possess got whatever difficulty getting cash dorsum to caput office. It's truly non an issue.
However the society has been borrowing fairly aggressively offshore. This disclosure from the Q is interesting (and involves borrowing upwards to the limits of covenants).
In July 2014, the Company's subsidiary inwards Nippon borrowed iii billion Japanese yen (approximately $30.0 million), which is due on September 30, 2014. In July 2014, the Company's subsidiary inwards Republic of Korea borrowed $20.0 million, which is due inwards Dec 2014, alongside a correct to extend the term for an additional vi months.The borrowing of $30 meg inwards Nippon for 2 months is outright strange. It's similar hey, I got $234 meg inwards the bank, tin you lot spot me $30 meg for 2 months?
Meeting covenants inwards the 3rd quarter
The covenants require that they teach the "aggregate amount of restricted payments" to overstep the defined cash flow amount yesteryear less than $50 meg yesteryear the halt of the 3rd quarter.
This requires something similar $150 meg of cyberspace cash generation in this quarter. This would live on inconsistent alongside the guidance only is inside the hit that they generated inwards the concluding 2 quarters of 2013.
It seems unlikely to me that the society is going to overstep its guidance yesteryear such a massive amount inwards this quarter.
But miracles happen. After all - fifty-fifty alongside all his bad karma Richard M. Nixon seems to possess got been reincarnated equally an accommodating only hard to accomplish banker at JPMorgan Chase.
John
PS. Ford pardoned Nixon on Sep 8, 1974, most just forty years ago. It is proficient to possess got this occasion to remember.
======================
Post script:
I am barely awake (early forenoon inwards Sydney) only the society has issue a brief SEC filing inwards response to this spider web log post. To quote:
In response to questions regarding the Fifth Amendment (the "Amendment") to the Amended in addition to Restated Credit Agreement (the "JPMC Agreement"), amid Nu Skin Enterprises, Inc. (the "Company"), diverse fiscal institutions, in addition to JPMorgan Chase Bank, N.A. equally administrative agent, filed equally Exhibit 10.3 to the Company's quarterly study on Form 10-Q on August 12, 2014, the Company notes that the Amendment, equally filed, contained an inadvertent typographical fault on the signature page. The Amendment was signed yesteryear Richard M. Hixson, Senior Underwriter, JPMorgan Chase Bank, N.A., non Richard M. Nixon. As previously disclosed, the JPMC Agreement expired pursuant to its price on August 8, 2014, prior to which all amounts outstanding thereunder were repaid.This it appears clears upwards the resurrection of a dead President. It does non clear upwards the (substantial) breach of loan covenants - a breach I intend is inevitable side yesteryear side quarter.
I am intrigued equally to how the typo arose. I possess got non had fourth dimension to confirm or deny that the document was signed yesteryear Richard Hixson only I would live on surprised if it were not. There is press focus on the outcome now.
I possess got flora a Richard Hixson of appropriate rank at JPMorgan - notwithstanding he plant inwards information technology hence is non truly a candidate. But JPM is a large place. There is also a George Bush there...
There is no reference (other than this filing) inwards the SEC database to "Richard M. Hixson" in addition to no reference at all to "Richard Hixson". I possess got non yet tried all the other spellings.
No comments