MF Global announcement

Discussion in 'Stocks' started by 1nibbler, Mar 26, 2008.

  1. m22au

    m22au

    #21     Oct 25, 2011
  2. zdreg

    zdreg

    thanks. I thought you might be using its meaning as the term prostitutes but then again ceo corizine was a governor and was from the Goldman.
    http://en.wikipedia.org/wiki/Wowser
     
    #22     Oct 25, 2011
  3. Taurus Mutual Fund

    Welcome to Taurus mutual fund website. Taurus is one of the leading mutual fund companies of India. Learn about investing into schemes and equity and debt funds. Check out the latest NAV’s, sensex news and market updates.
     
    #23     Oct 25, 2011
  4. m22au

    m22au

    #24     Oct 25, 2011
  5. m22au

    m22au

    Corzine clause in recent bond sale:

    "Call MF Global's CEO Jon Corzine the $325 Million Dollar Man "

    http://www.cnbc.com/id/45034792

    Less well known is that back in August, the commodities giant sold $325 million of five-year unsecured bonds that included a provision that would offer higher interest rates if Mr. Corzine left the firm for a government job.
     
    #25     Oct 25, 2011
  6. zdreg

    zdreg

    what are the chances that majority of bondholders would rescind the clause and accept a lower rate if he leaves and the bonds get paid off earlier?

    if there is a 60% haircut on the southern european sovereign bonds what happens to mf global?
     
    #26     Oct 25, 2011
  7. m22au

    m22au

    The earnings release says
    "As of September 30, 2011, MF Global maintained a net long position of $6.3 billion in a short-duration European sovereign portfolio financed to maturity (repo-to-maturity), including Belgium, Italy, Spain, Portugal and Ireland"

    so a 60% haircut (at this stage) is unlikely, especially for Italy, Spain and Belgium.

    There is a chance that bondholders could rescind that clause, but given today's announcement, they would have to raise new debt (or equity) at much higher interest rates. So in practice, the clause will probably remain.

    In my eyes the biggest concern for the company in the coming weeks and months is a significant loss of customer assets and trading revenue. I will assume that the net trading revenue for this quarter will be lower than last quarter, and that they will report another quarterly loss. With Moodys close to cutting their credit rating to junk, the future looks bleak.
     
    #27     Oct 25, 2011
  8. m22au

    m22au

    #28     Oct 25, 2011
  9. zdreg

    zdreg

    thx for your thoughtful response.
     
    #29     Oct 25, 2011
  10. m22au

    m22au

    Here is some more detail on the PIIGS bonds held by MF:

    http://ftalphaville.ft.com/blog/2011/10/25/711566/mf-globals-eurozone-trades/

    includes a link to

    http://www.mfglobalinvestorrelation...4911&p=irol-newsArticle&ID=1620914&highlight=

    which is repeated here
    http://finance.yahoo.com/news/MF-Global-Reports-Second-bw-3226318076.html

    "MF Global Reports Second Fiscal Quarter 2012 Results"

    ****

    all figures in millions

    total $6,292

    Italy $3,213
    Spain $1,111
    Belgium $603
    Portugal $997
    Ireland $368

    latest maturity for portfolio is December 2012.
     
    #30     Oct 25, 2011