Razor, from the point of view of the bandits, they actually would love to see price increase immediately after they issue the floorless, that allows them to short into strength and at progressively higher prices. They can, if they are so inclined, even short twice the face value of their instrument (using margin), but of course, they will then take on normal risk on the unhedged part of their position, they rarely take unhedged risks (VBG). They really do not have to, since they can now use the money from the shorting activity and issue a floorless to another company in dire straits.
By the way, I learned that the Street" does not particularly like our nomencalture, "Floorless instruments", they dubbed these "Serial debentures", what a laugh. Well, I'll accept their nomenclature, with a small modification, "Serial Killers".
Zeev
Zeev |
