GREY:SBIYF - Post by User
Comment by
767piloton Feb 07, 2012 3:46pm
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Post# 19501552
RE: RE: To understand the bondholders
RE: RE: To understand the bondholders Now we are getting warm........call provision at 120% of face value.
If the price of the stock goes up the warrant goes deeper in the money and the value of the bond goes up. Obviously SBS does not currently have the cash to pay out the bond so they won't call it just yet, however, if the Tasly people commit to some sort of 'friendly' financing and give SBS $10 million and gain control fo the company......SBS will then have the money to pay out the bond and will call it in at 120% of face value + interest.
The holder of the bond has to be concerned about that possibility and is probably selling into the market here to realize profits which may get taken away in the near future.
Not being able to see the actual terms of the bond its hard to tell if there is a provision to allow them to convert once the recall has been made or not. Either way I would not expect the current bond holder to own that piece of debt 6 months from now. He will either be called out at 120%, exercise and sell stock or exercise and hold stock.