ESLR - Evergreen Solar Message Board

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Technology Stocks : ESLR - Evergreen Solar

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From: bob zagorin	9/17/2008 9:25:46 AM
	1 Recommendation of 112

Lehman stock loan dilution risks overblown for SPWR and ESLR - Signal Hill -"buying opportunity" Lehman stock loan dilution risks overblown for SPWR and ESLR - Signal Hill (76.12 +3.72) -Update- Signal Hill believes the mkt, including some sell-side colleagues, is making an issue of potential share dilution for ESLR and SPWR when such risk is unlikely despite the Lehman Brothers (LEH) bankruptcy. Firm bases their view on readings of the stock loan agreements as filed with the SEC by both SPWR and ESLR. Specifically, the stock loan agreements, between LEH and ESLR and LEH and SPWR, for stock loans in connection with establishing hedge positions for their respective convertible debt securities issued by ESLR and SPWR, require LEH to establish collateralized accounts for 100% of the value of the loaned stock in the event of (summarized) a credit downgrade, restructuring or bankruptcy. If the operating units that are the borrowers of ESLR and SPWR stock were to enter bankruptcy themselves, firm believes that the ESLR and SPWR shares would be treated as encumbered assets and, therefore, wanton distribution to LEH creditors would be quite unlikely. Firm sees this as a buying opportunity for SPWR and ESLR.

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