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To: E_K_S who wrote (51159)	3/22/2013 5:49:05 PM
From: MCsweet	Respond to of 78751

PFH trust preferreds for JCP: E_K_S, I think you are mostly right on the 3rd party trust preferreds for JCP, but I'd like to point out a subtlety that might be instructive. These trust preferreds are backed by 2097 debentures that are bonds. Unless you have some reason to believe that these debentures are subordinated (which I don't from reading the trust preferred prospectus, but I won't guarantee that information), then they have the same standing as other bonds, including payment in default. That being said, the fact that these debentures are being held in a trust and bad things can happen to the trust preferred holders if the trust winds up (as in the event of a default). I'll send a link to an example from the Income Investing board Message 28787807 Basically, the 3rd party trust add an additional layer of complexity and risk that is hard to get your head around unless you are a lawyer that likes to read through prospectuses. So that bottom line is that I agree with you that I'd prefer not to own trust preferreds in the event of a bankruptcy. I'd still rather own trust preferreds over the standard perpetual preferreds, which I also agree will most likely by worthless. MC