Can't lose opportunity

I did something similar with EXXI a couple weeks ago. Bought $12k worth for a few cents on the dollar. Only risking a few hundred total. They have been buying up their debt like crazy, if I recall correctly they have bought up $1.7b worth for $200m approx. This seems like a reasonably good sign to me that they don't intend to file BK as they still have quite a bit of cash, and this alone has saved them $6/barrel in production costs, but who knows. One concerning thing I didn't discover until I had already bought was they have a large outstanding issue of second-lien bonds that they don't appear to be able to buy up on the open market. You have to be an institution to trade them, so I would assume in a bk they would prevent the rest of the bondholders from getting much.

Anyways, we will see! I've got $16k of debt @ par value across 3 companies and $9k of preferred shares and paid under $2k for all of it . All of them just about are 10-1 risk/reward or better so who knows.

Good luck!

 

I recall reading about the deal; why is APO's mcap only $3B? Is this another structure that's not public?

 

I show $34.7B for the market cap? Anyway market cap is just the number of shares outstanding times the price per share. It's possible to have debt significantly in excess of market cap. A lot of PE shops actually work on that model, they buy a company, lever it up, take the cash out, then cut it loose.

 

I think APO is the management company. They earned 7Bn + billions in divs in one of their PE funds. I don't know if that was before or after fees. Even if it were before fees, can you imagine splitting 3Bn between the 10 guys who structured the transaction?

 

LYB has 34bn market cap.

 

1

Sick deal.

 

The LINE bonds I bought are up about 2.5x what I paid for them, however when I went to close them today I get an error on Interactive Brokers, wont let me perform the trade. However, I see bid/asks changing and trades taking place. Any idea what it could be? Gives some non standard redemption error.

 

talk to customer service chat.
their efficiency has been greatly improved over the last years imho.

 

They probably have stopped trading with the accrued interest I think is why. You probably have to call to do the trade. BTU is in a similar position as LINE, and their bonds moved up a decent amount yesterday, but it says you have to agree to an interest rate before the transaction..