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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35468  
Subject: Re: General Motors 8,375%: help? Date: 9/13/2007 4:29 PM
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"+8,5% is pretty good and if in the next year of so the price goes up you can also make a profit on the price of the bond?"

Where is this bond listed? If it is one of the asset backed securities traded on stock exchanges at discount commissions, you can easily sell at a profit if that happens. But if it is a listed bond or OTC bond, you can only sell it to a bond trader, and those prices are not usually published. Selling the bond will probably cost you a year's imterest in bond dealer mark-up. So no, you can't expect to profit.

If however the bond gets called, GM will probably pay full face value, maybe plus a premium. But they will only do that if they can borrow the money cheaper elsewhere. And that is most likely only if GMss bond rating improves markedly.

Could happen, but risky.
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