The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments


Subject:  Re: Any updates on Edison Mission Energy bonds? Date:  4/4/2014  12:07 AM
Author:  howardgt Number:  35237 of 36785


From the news releases below, I think we may end up getting close to 105, but I’m not sure, maybe I’m counting the 2015/16 payments twice. I interpret these reports as $3.2B cash now plus $0.4B stock plus $0.41B in 2015/16 payments, equaling a total of $4.1B among $3.824B of claims. This equates close to $1.05 to the dollar.

Anyway, as you said, it was a good outcome for a BK bond. Taught me to hang on to the end. My costs were in the mid 70’s and high 50’s after interest payments. I sold 2 bonds at Etrade in the mid 70’s (mistake, live and learn). I held 5 bonds for a total return of about 60% over 4 years.

I’ve come to the conclusion that defaulted bonds are not necessarily a problem… many times they create an opportunity!


Here are some news release notes I kept today:

According to the notice, the reorganization trust that will distribute assets to the company’s creditors received roughly $3.2 billion in cash and about $400 million in NRG stock (based on about 12.67 million shares and NRG’s stock price in late morning trading of $31.90/share) as a result of the closings of the sale and settlement.

According to the company’s disclosure statement, total unsecured claims in the case will be roughly $3.824 billion.

(a) the Reorganization Trust received the Estimated Cash Purchase Price (as defined in the Purchase Agreement and subject to certain adjustments) of approximately $3,024,181,595 and 12,671,977 shares of NRG Energy, Inc. common stock as part of the Sale Transaction and pursuant to the Purchase Agreement.
(b) the Reorganization Trust received the Effective Date Cash Amount (as defined in the EIX Settlement Agreement) of $225,000,000 (less $50,000,000 deposited to fund the EIX Escrow Account) as contemplated under the EIX Settlement Agreement. In accordance with the Plan, the Reorganization Trust has commenced the distributions provided for under the Plan.

EIX would make $634 million in total payments through 2016 (including interest):
$225 million upon closing
$199 million on September 30, 2015
$210 million on September 30, 2016
Copyright 1996-2020 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us