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To: mishedlo who wrote (209555)	12/13/2002 5:39:31 PM
From: ild	Read Replies (1) \| Respond to of 436258

Convertible Bonds e-analytics.com

To: mishedlo who wrote (209555)	12/13/2002 5:44:52 PM
From: cfimx	Respond to of 436258

>>What precicely does that mean to MU, when and why. That convertable gave the buyer the right(obligation if MU above strike price?) to buy MU at $45 or whatever. So what. No idiot would buy MU at $45. What am I missing here. Apologies cause I think it is obvious but I do not see it. They have an option to CONVERT their debt into MU equity if its attactive to do so; they don't really BUY MU equity. They don't put any money up. They put money up to buy the origianl bond; the conversion is a cashless transaction_give up the bond, get the stock (which MU issues). So, you're right, they would not convert their bond into $45 of MU equity with the price down here, so they HOLD the bond, continue to get interest, and when it matures, their PRINCIPAL back. So, MU must find a way to pay the bondholders their PRINCIPAL when the bonds mature. Only, they probably never planned for this since their stock was supposed to go to da moon and the bondholder was supposed to convert and get on the equity rocket.