UnThreaded | Threaded | Whole Thread (20) | Ignore Thread Prev | Next
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: Re: EMZ - liquidity now Date: 4/21/2011 4:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
The description of the newly-issued EMZ clearly says The bonds are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. See the IPO prospectus for further information

Why would what amount to a very long-dated, zero-coupon bond be attractive to an investor seeking current-yield?


"Purchasers will not pay and the sellers will not receive any accrued and unpaid interest" does not mean that it's a zero coupon bond and that the issuer will not be paying interest. All it means is that, when bought/sold on the secondary market, accrued interest is expected to be reflected in the price that is paid, and not paid as a separate item, as it is with many bonds.

Per the prospectus http://www.sec.gov/Archives/edgar/data/66901/000006598411000... the issuer will pay interest:

We will pay interest on the bonds on February 1, May 1, August 1 and November 1 of each year, beginning on August 1, 2011. Interest will accrue at the rate of 6.0% per year and will start to accrue from the date that the bonds are issued. As long as the bonds are registered in the name of The Depository Trust Company (“DTC”) or its nominee, the record date for interest payable on any interest payment date shall be the close of business on the Business Day (as defined below) immediately preceding such interest payment date.

AJ
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (20) | Ignore Thread Prev | Next

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