Joel:This is all good dialog and I think what it tells us is that debt is a complicated subject with many permutations. I'm making my comments based upon what I have read and the research I have performed for my investments.A lot of what you are saying is well reasoned but still does not seem to mesh with what I see....most specifically with regard to secured debt. It is obviously true that a loan contract can be drawn up with any terms that both parties will agree to which of course means that a secured loan could also have recourse to the corporate entity. However, based upon my experience this must be extremely uncommon for investment grade and near investment grade corporations whose debt we would buy in the bond market. I do however think secured, recourse loans are relatively common in the "senior loan / leverage loan market" which are essentially mortgage loans that banks make to what are typically smaller, FAR below investment grade (and often unrated) business which would also (typically to almost never) not have publically traded stock.My experience has been that most investment and near investment grade corporations don't even have any secured debt. The only sector of the market where I see a lots or secured debt by investment grade corporations is in the REIT space. I have performed quite detailed research on ~ 30 equity REITS across the office REIT, industrial REIT, retail REIT, and apartment REIT sub-sectors and found zero REITs who had secured debt that was also recourse to the corporate entity. In fact, during the darkest days of the credit crisis, reducing/eliminating/managing recourse debt was an extremely hot topic during REIT conference calls and the recourse debt was always unsecured debt.Too bad we could not have verbal dialog over this topic because I think we could cover a lot of ground and this is a very important topic.
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