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Non-Tech : Bill Wexler's Trading Cabana
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To: RockyBalboa who wrote (1561)11/8/2006 3:51:56 PM
From: RockyBalboa  Read Replies (1) of 6370
 
A coarse review of DRRA filings yields a recovery value of 0 for the junior and about 48 to 58 for the senior debt, using fitchs methods of discounting receivables inventory and on the run expenses. Depending on where to look the AP aren't that letally high nor is the drawn down bank debt. Clearly with the 6.5x geared (notional, 59x at market prices) CDS settlement coming up the price may get a little more depressed. Every dollar counts.

Entirely possible that the give away the senior debt below 20. The sellers of CDS may opt out but they have no hand to show. They only can sell bonds but at what price?

This requires that various other debt does not get any preferential treatment but attributes little value to any kind of fixed assets.

For hedging purposes the trust security and the commons still offer some dollars.
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