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Technology Stocks : Leap Wireless International (LWIN)
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To: pcstel who wrote (2349)7/3/2002 12:56:30 PM
From: A.L. Reagan  Read Replies (1) of 2737
 
I believe the loan covenants require LU to hold a controlling interest in the vendor debt. If you think about it. If you were LU. Would you sell away your ability to control your future ability to make amendments to the facilities.

Now that doesn't seem to make sense. If you were LU, you would want paper that was merchantable, as well as collaterizeable for your own debt - which no LU lender would ever accept if the VF asset could only be held by LU.

The party that might have the most vested interest in a covenant that restricted LU's ability to transfer the loans would seem to be LWIN - as another holder mightn't be so accomodating to make covenant revisions.

In the more guts than brains category bought a whack of LWIN this morning at $.74.
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