UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: StuyvesantGrad70 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: Re: interesting arb on DELL bonds / equity Date: 1/19/2013 9:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
Dell Bonds Turn ‘Toxic’ on Leveraged Buyout Rumors
http://blogs.wsj.com/marketbeat/2013/01/14/dell-bonds-turn-t...

“In order for Dell to go private, they’d have to issue debt and buy back stock. Leverage ratios would go through the roof,” “What always happens [in an LBO] is the stock skyrockets and the bonds plummet, and that’s exactly what’s happening today.”

The tumble in Dell bonds “highlights the importance of buying bonds with very good covenant protection,”says Scott Kimball, portfolio manager at the BMO TCH Corporate Income Fund. The Dell bonds lack any “change of control” provision whereby investors can sell the bonds back to the company at or around par in case of a buyout. Kimball says those protections are increasingly important because “the longer interest rates stay low, the more of this activity we will see.”
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement