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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (1414)	8/17/2002 5:40:54 PM
From: Allen Furlan	Respond to of 1438

Zeev, since you have delved into this esoteric world, what do you know about LYONS. These zero converts have a put attached and company usually has option of paying off the put in cash or stock. For a company in trouble, which has no recourse to credit markets, it would seem to me that the LYON becomes a toxic convert. An example would be eln LYON. I recently bought the sgr LYON at 500 to be redeemed in May 04 at 657. Since this bond represents majority of sgr long term debt and since they seem to be viable business the YTM of about 15% seems almost to good to be true. Also from prior post from semi infinite about lu pref I started thinking about conditions of other debt on ability of a company with LYONS to pay cash. However it would seem to me that the placement of LYONS would have considered that. Thanks for any insights you might have.

To: Zeev Hed who wrote (1414)	8/17/2002 10:22:45 PM
From: Mike M	Respond to of 1438

Zeev, while you painted a very good picture of floorless', your example assumed that the perp would at least make a semblance of attempt to operate within the law...i.e. borrow the short shares....Instead, as crooks do, they found another short cut and sold stock naked...This way they didn't even have to worry about such esoteric things as upticks... I hope these lowlifes get to spend the rest of their days in the slammer...and that their guards formerly held shares in the companies they bilked...