TSX:IBG.DB.E - Post by User
Comment by
patenrighton Jun 28, 2014 5:49pm
182 Views
Post# 22703352
RE:RE:Short Selling
RE:RE:Short Selling
have no clue who is 1 starring u - aint me - but doesnt surprise me how some here would 1 star u though
and if u dont know why the bonds would be trading higher than 50 if the market thought they were getting settled with shares than you are not that bright. ah lets see, if settle with shares get 100% recovery with shares (yes still need to sell them for those wishing too) but for those who believe in the company and want to hold shares longer term by buying bonds at 50 and then getting shares in settlement, one would effectively be getting the shares at around a 30-50% discount from the 30 dy avg price. so with investors knowng this, the bonds would very likely be bought up so the price would be higher than the current 50 due to increased demand and like I said likely in 60-80 range.
oh and EV will still the same with a share settlement as while yes , mkt value of debt is 23M and shares are replacing 46M, with 2014 bonds out of the way, risk goes down and thus multiple rises thus counter balanacing any drop in EV due to the difference between mkt and book value of the debt, in fact one could even argue EV might actually rise due to the now lower financial risk (mainly refinancing risk).
chew on that ....