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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (56458)	12/30/2015 12:36:27 AM
From: Jurgis Bekepuris	1 Recommendation of 78714

One of the risks with o&g bonds is that the company does institutional tender replacing current bonds with secureds. On the positive side, this lowers the debt outstanding and possibly interest cost, since usually they tender below par (although at higher interest rate). On the negative side, if the company goes BK, non-secured bond holders are now behind secureds in recovery... Both CHK and DNR did these. In both cases the tenders were for institutional holders only, so no chance for small investors to tender. AFAIK secured's are not trading or at least not available (yet?). In other news SFY now has 2 days left until default... I wonder if they pull out a secured recap at the last moment too... Anyway. ATW bonds may work out. Currently my benchmark to compare against is X bonds - does the company look like they have a better financial position than X? Is the yield comparable/better than X's (~26% YTM for 2018's). Take care.

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