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Subject:  atp bonds update expands liquidity by $35MM Date:  6/21/2012  12:03 PM
Author:  altstrat91 Number:  34232 of 36218

so there was an interesting development yesterday on the 2015 atpg 11.875% bonds yesterday with cusip 00208jae8.

i did end up buying another chunk in the $45 handle to bring down my total average cost on the position to 60 cents on the dollar including additional costs basis for some cheaper otm puts i also acquired.

once this liquidity deal news hit the wires, the 2nd lien bonds picked up a pretty decent bid. even today early AM when i checked there was a $1MM+ block hitting tape well above the best ask price at the time in the $49 handle.

the only other positive aspect to add in terms of potential recovery in a worst case filing scenario, is that there is a report floating out around there where these bonds were basically downgraded by s&p to a 6 rating, which is the worst meaning zippo.

however the entire analysis was done under the premise that oil was $45 a barrel. so in the real world, the upside is potentially more with respect to recovery because we all know oil probably will not be $45 a barrel anytime soon. hence the reason why i think these bonds held up at 45 cents on the dollar.

but who knows what happens next. these bonds could pull an eastman kodak in a month and you might be able to buy them for $30 handle or lower.

its interesting how times have changed. back in 2008/2009, it seemed you had a ton of companies on the brink like etrade, pier1, mgm casino, unisys, yrcw, sunamerica, and way more with all kinds of bonds fetching a quarter on the dollar or less, yet with a little patience and not a very long holding time, some bond holders made out like bandits in a new age gold rush.

seems like now adays when once a company goes on the brink and their bonds trade down below that 30 cents on the handle tranche, its the point of no return.
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