Floorless Preferred Stock/Debenture Message Board

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Strategies & Market Trends : Floorless Preferred Stock/Debenture

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To: Zeev Hed who wrote (1135)	2/10/2000 10:29:00 PM
From: Kailash	of 1438

Zeev - question about MCLL. They've just entered into a joint venture. Yesterday's press release states "the investors will buy an aggregate total of $30 million worth Series A convertible preferred stock in the venture." It appears the joint venture will be "bankruptcy remote" from MCLL. As of the last 10K in September, MCLL had long-term debts of some $786M. They're paying 19.5% interest on most of it, indicative of perceived risk; they also have a large working capital deficit. Net operating loss for the whole of 1999 should be around $173M. Given this information, what are the likely terms of the convertible? Last week and at the time of the deal, the stock was trading around $2; this is what the investors paid. It then surged in three days to 14 and closed today at 11. Appreciate any views you have on this! Kailash

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