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Strategies & Market Trends : Value Investing
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Area51
To: Area51 who wrote (72402)2/24/2023 8:20:14 AM
From: Spekulatius1 Recommendation  Read Replies (1) of 78659
 
LUMN 2028 Bonds
Looks like you bought the 6.975% bonds due on 1/15/2028. in IBKR that's IBCID29204722 around 64c on the $ yielding ~18% to maturity. This looks a whole lot better than the stock to me.
Now the question is - what does this look like in bankruptcy - the stock will be wiped out and are the cash flows from the business enough that the ~33% discount on par makes you whole.

There is also a risk that they shovel some secured debt ahead of this unsecured one (almost a given in bankruptcy). in any case, the discount to par becomes more important than the YTM and it's hard to foresee the maneuvers the bankruptcy sharks may pull.
I do think right now, if you haircut the debt by 1/3, the money you invested is money good.
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