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URL:  http://boards.fool.com/black-m-rates-svu-bonds-ur-a-notation-they-30408594.aspx

Subject:  Re: morningstar on supervalu, no mention of bond Date:  12/1/2012  12:11 PM
Author:  trader2012 Number:  34541 of 35367

Black,

M* rates SVU bonds ‘UR-‘, a notation they don’t explain . But they do list two nearby issues (the 7.5’s of ’14 and the 8’s of ’16) and the 0’s of ’31, and the financial ratios they calculate for the company (Debt/Assets, Debt/Equity, CA/CL, and Cashflow/Total Debt) --when compared to the industry averages-- aren’t good. http://quicktake.morningstar.com/StockNet/bonds.aspx?Symbol=... In other words, you’ve managed to find yet another loser, which isn’t necessarily a bad thing. Identifying the trash issuers that are better avoided might help would-be yield-hogs to stay out of trouble.

But the real challenge, of course, is to price their full yield-curve (i.e., all of the debt that shows up in the offering-lists under the names of 'Albertsons' or 'SuperValu') and determine if any of it could be bought: (1) under what conditions? (2) at what price? (3) in what quantities? That would be a post worth writing and reading, because if that problem can be solved for one issuer, it can be solved for all issuers. Process is what matters, and most fixed-income investors don't have a viable one. They lack a written business plan, and their underwhelming investing results are the consequence.

Charlie
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