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Reply #3: Not sure what you are talking about [View All]

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Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU
FreakinDJ Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Apr-04-09 01:01 PM
Response to Reply #2
3. Not sure what you are talking about
Too bad bank creditors aren't under the same pressure. They're still living in a financial world of the past, where corporate bond investors -- whether they be individuals, pension plans or hedge funds -- loan companies money and get regular interest payments. If they keep the investment until it matures, they reclaim their principal.

For example, investors who took part in a $1 billion 30-year bond offering by Citigroup in 2002 are still being paid a 6.625 percent yearly return on each $1,000 invested and are scheduled to be paid back in full when the bonds mature in 2032. If they sold now, they would get about half that value since bonds of that vintage are currently trading at around 56 cents on the dollar.

http://finance.yahoo.com/news/ALL-BUSINESS-Bank-creditors-apf-14850712.html


So if they sell out now its worth $.30 cents on the dollar of the $.56 cents the writter of the article claims, or 100% plus interest as the bond was originally structured.

Question being - "Do we allow the bond holders to determin if the entity stands or fails? Geez that would be one for the courts since they entered into the agreement of the bond - as long as they make their interest payments
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