RE:RE:RE:RE:LRE Debentures "Interest flat"
uahub wrote:
Just to bring this discussion back--hopefully can answer my question: are we going to be paid $48/1000 face value upon close? even if we didnt pay the accured interest after the default? That would bring the value of LRE.DB to 79.8, why people are still trading LRE instead of LRE.DB?
48.5/52 vs 71/79.8, LRE.DB is trading with a discount? am i missing sth?
As a term of the forbearance extension, the credit agreement has been amended to restrict the Company from making any payment of interest on its outstanding 6.40% convertible unsecured subordinate debentures (the "Debentures") without the prior written consent of its Lenders. As a result, the semi-annual interest payment on the Debentures payable February 1, 2016 will be required to be deferred. However, this interest will be paid on closing of the Arrangement in connection with the acquisition of the Debentures, together with all other accrued and unpaid interest on the Debentures, in accordance with the Arrangement. The Toronto Stock Exchange (the "TSX") has advised the Company that the Debentures, when they commence trading on January 26, 2016, will trade on an interest flat basis until further notice. The TSX has advised that it will not report accrued interest regarding any trades made on an interest flat basis to its participating organizations.
My understanding of the situation, in regards to the accrued interest, is exactly the same as Deisman's in the post he did just prior to mine.
If you buy now, you pay no interest to the seller whatsoever and keep all the interest that would be paid about closing. More or less a bit under 5 dollars on 100 dollars face value.
You said : "48.5/52 vs 71/79.8, LRE.DB is trading with a discount? am i missing sth?"
It is my belief that you are not missing anything... But most other market participants are... Perhaps a general missconception of debenture and the complications associated with them are at fault.