No. of Recommendations: 2
Something I just noticed at E*trade, United Refining is next callable on "03/29/2011 at 100 on 30 days notice." What's the point of the tender offer then? The difference in cost between their tender offer and simply calling the bonds seems insignificant. What gives?

Welcome to the wonderful world of junk. Very simply, there is likely something in the covenants or indenture of your bond which could be interpreted as not allowing hem to refinance in the way they intend. So for the avoidance of doubt/litigation, they are offering a smidge above the call price in return for the bonds and consent from the bondholders to do their refi. If they get enoough bondholders to agree (commonly 2/3 of total or some such), they can do the deal. Usually they then immediately call the remaining bonds after the tender offer is complete.

Since they will call anyway, I would go with the tender and get the extra pittance. It is your best option.
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