America On-Line: will it survive ...? Message Board

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Technology Stocks : America On-Line: will it survive ...?

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To: jack rand who wrote (5934)	11/14/1997 9:15:00 AM
From: J.S.	Read Replies (2) of 13594

"What I don't get is who anywhere in the world would buy 4% AOL 5 year paper (subordinated yet) on stock at 40% discount to strike; when 5 year T-Notes yield 5.65% and.." This is why I think this was really a swap of current debt for long term debt. Remember what keeps AOL from being completely bankrupt is "deferred subscriber acquisition costs" -- the phoney baloney accounting gimmicks that they are famous for. This does not pay the bills. Their creditors are a credulous lot. I can imagine they would be happy to take these notes (with the implied long term option) in return for what AOL owes them. It may not have been done directly, but AOL's bankers have arranged it so that the net effect was exactly this. joe

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