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Non-Tech : Convertible Bonds
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To: Jorj X Mckie who wrote (24)10/19/2002 5:10:05 PM
From: Rocky9  Read Replies (1) of 83
 
I haven't followed the JNPR bonds, but did look at them just now.

It looks like they are trading for around 69, so the yield to maturity is about 14.5%. According to the last earnings announcement, it looks like the company bought last quarter ~$208M of the outstanding $1.15B bonds. It recognized a gain of $62.8M on the buy, so it paid ~70 on the purchases.

It also looks like it has ~$1.155B of cash and cash equivalents. I would think that it would continue to buy the bonds, since the market value of the bonds is only $659M. So it could book a gain of almost $300M by buying the bonds. Unfortunately, I don't think that JNPR can make $300M any other way anytime soon. JMO.
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