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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35362  
Subject: Re: Union Carbide (DOW) 7.75 of '96 Tender Offer Date: 3/4/2011 5:37 PM
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brewer12345,

You wrote, Personally, I would submit at the lowest tender price and hope to get taken out higher via the dutch auction process and be happy with the capital gain. Then again, I would never have bought an 85 year maturity in the first place, so WTFDIK?

Well in that case you'd bid 0 on the Clearing Spread Premium...

I bid 20. Actually, I've been busy at work and haven't had time to think about this anymore. So the deed is done. My only option now would be to withdraw completely; but I don't think the tender offer is that bad, so if I only get the 270, I'll take what they give me.

And if you're holding long-term bonds and you're happy with the issuer's fundamentals, what difference does it make if they're long or ultra-long? I mean if the company goes south - it's probably not going to happen on your schedule. I figure that if I'm going for 30-year bonds, I'll be lucky to see them mature. Why not garner a little extra yield now and let my kids worry about it when I'm gone?

I mean it's not like I'm going to have my entire portfolio in ultra-long bonds... And I'm hoping I'll manage my money well enough that I'll never spend my last dime.

And hey! I will have made over 30% in one year on this issue. Not bad money on a bond. And only about a 2% move in YTM to boot! Image that...

BTW, were you around this time last year when I bought these things? http://boards.fool.com/union-carbide-bonds-28430454.aspx?sor...

- Joel
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