> With the DIP last trading at 68 and change, it would appear there is a slim chance for it to be repaid in full.
>
>This, of course, means "no soup for you today". Everybody below gets stiffed. Not even crumbs are
>tossed to the subordinated classes.
no argument from me. i certainly don't want to seem like i'm pumping the bonds, even at its current sub-4 price. i feel a zero is the most likely outcome for the 2nds, but i also think the potential outcomes for bonds has a fat tail, which gives it some option value... at least for now. in another week or two, that may no longer be the case.
i'm not surprised the DIP is trading down to 68... i wouldn't touch it at this price. the (presumably failed) auction is/was their big chance to get their cash quickly and skedaddle (and of course, leaving everyone else holding the empty bag). unlike the 2nds, there's no chance of an fairy-tale ending with 5x payout from the current price, and there's a long way to fall from 68 if things continue to go poorly.
if you were the DIP and couldn't get a decent bid with the auction strategy, what would you do? a favorable ruling on the NPI/ORRI issue would do wonders for the DIP price, but how long does that drag on? |
