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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: ChanceIs who wrote (80432)	6/28/2007 9:36:24 PM
From: Think4Yourself	Read Replies (3) \| Respond to of 306849

First off, thanks for the info on the puts. They don't work exactly like I thought they did. Secondly, I agree with your assessment of the convertibles. I would only add that the interest rate reflects the concern (or lack thereof) the investors have about the company's future, and should always be lower than if the loan was not convertible. In the case of AHM the loan is not only convertible but also bears a 9.75% interest rate. Contrast that to EPIC, an up and coming software company. They recently issued 200 million in convertibles at 2.375%. Just a SLIGHT difference there! :) There is, as you noted, more to it than that. In this case the interest rate alone suggests AHM is desperate for cash.