Bombardier Inc. T.BBD.A

The 2034 bonds consequence if Bombardier lose the case

[lb1temporary]

The bondholders ask for immediate reimbusrment of the principal and the payment of all the future interest payments at the present value.

If the bondholders win, the reimbursment of the principal of 510 M$ is not a so big problem apart from the fact that the 2034 debt was not the priority of the management, they could have sleep on it till 2034.

The present value of all the 23 interest payments (11,5 years) computed at 7,45% (the rate of the bonds ) is 290 M$. That is the real problem of this case. The 19 M$ semestrial payments could have been paid with the 12 future years of cash flow instead of immediately if the bondholders win the case.

And the strategy to dilute the old bondholders with 250 M$ of new holders could have backfire if you have to reimburse all the bondholders (510 M$ instead of the original 250 M$).

That's the worst case scenario; Bombardier could win its case, the judgment could not allow the reimbursment of all the 23 payments but only the principal and a reasonnable amount of compensation.

[NoNameAtAll]

The case is only for a hundred and some million of the bond with the request for reimbursement of the principal and future coupon payments.  So it is really no big deal even if they lose.  Reality is that they are a long way from judgement because this was just a preliminary attempt tp have it thrown out before any of the litigation process gets going.  So company will have plenty

[Acuras1]

The ridiculous claim arises from trying to "collect" future payments while claiming damage. As some have pointed out refinancing the 2034 bond + paying some sort of penalty for the financial  manover (say court costs). Mostly noise from hoodlums bondholders and their lawyers (who will see more money than anyone else here:) GLTA 

[johnney]

Exactally!!

[lb1temporary]

My understanding is that first they asked for the immediate redemption of the bonds arguing a default.  Then they apply the rules written in the case of a voluntary redemption of the bonds in the forbidden period for such a redemption. Bonds are not redemmable unless the company is sold or after a specific date, usually 1 to 3 years before the term. To discourage it, the payment of all the

[Shamhorish]

the big drop in bbd share price may be viewed as the scavengers market makers are saying to the world,, bbd will loose the case and end up paying  the principal of 510 M$ + all the 23 interest payments (11,5 years) computed at 7,45% (the rate of the bonds ) is 290 M$. that is an extra 800 millions (plus court fees , lawyers etc)!!!!