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Subject:  Re: EMZ - liquidity now Date:  4/21/2011  4:09 PM
Author:  aj485 Number:  32713 of 36218

The description of the newly-issued EMZ clearly says The bonds are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. See the IPO prospectus for further information

Why would what amount to a very long-dated, zero-coupon bond be attractive to an investor seeking current-yield?

"Purchasers will not pay and the sellers will not receive any accrued and unpaid interest" does not mean that it's a zero coupon bond and that the issuer will not be paying interest. All it means is that, when bought/sold on the secondary market, accrued interest is expected to be reflected in the price that is paid, and not paid as a separate item, as it is with many bonds.

Per the prospectus the issuer will pay interest:

We will pay interest on the bonds on February 1, May 1, August 1 and November 1 of each year, beginning on August 1, 2011. Interest will accrue at the rate of 6.0% per year and will start to accrue from the date that the bonds are issued. As long as the bonds are registered in the name of The Depository Trust Company (“DTC”) or its nominee, the record date for interest payable on any interest payment date shall be the close of business on the Business Day (as defined below) immediately preceding such interest payment date.

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