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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (36757)	2/28/1998 1:59:00 AM
From: Dee Jay	Read Replies (1) \| Respond to of 61433

I think your question is totally apropos and I sure don't have an answer - with the payout at the end linked to the lesser of $100.75 (151.5% of the $66.50 offering price) or the average closing price of the 10 days before the maturity date. That's something near 15% compounded annually over 3 years based on the 151.5%. Whoever is making the offer through Lehman Bros. Holdings (or Lehman Bros. itself) has figured out that they can borrow the money at these rates and make more than they have to pay back. either it's because they expect to earn more than 15% (much more if you look at the expenses in raising the capital) or they expect that CSCO will be dropping in those last 10 trading days since it's the lesser of the 2 earnings possibilities. That's why I say that this lends itself to some market manipulation to assure that they issuers profit. There must be a rational explanation behind YEELD and who benefits and how, as you ask, but it sure seems awfully gimmicky to me and for that reason is off limits. Dee Jay