It’s the market that’s buying the bond paper and shorting the common. Screw them to the wall!!
Interesting theory. If they could force a restructuring, they make out on both sides. Problem is as long as WCOM can service the debts, avoiding any defaults, then the creditors have no leverage to force a restructuring. The banks, BTW, have an incentive to take WCOM's side in avoiding a restructuring - they aren't buying debt at a discount, so they get screwed by any haircut (from face amount of debts) that the other creditors may be willing to take. Since the existing line that WCOM has said they would draw and term out is not secured, they would stand to lose big in a restructuring and have an incentive to get their lines refinanced. And when the banks come through with the new line, then the shorts are the ones screwed.
Bob
PS: Bought @ 94 cents today. Naz and S&P tested Sept lows and bounced nicely, though it would have been better if they'd held all the gains. |
