RE: RE: RE: RE: RE: RE: RE: Fairness Opinions and They voluntarily exchanged credit risk for lack of liquidity. They'll probably make out just fine, but now they're in it for the next 6 or 8 years before they can cash out. The fact that there's no immediate market for a security doesn't mean that they've taken a hit.
OK, we're going around in circles.
When I say that the MTN holders are taking a hit, I am not saying:
- that there is zero chance they will eventually get back more than 100% of par value
or
- that they are getting less than the current market value of their debt
I am saying that what they are voluntarily exchanging their MTNs (current market value 55% of par) for is worth less than 100% of par. And if that is the case. everyone who is outranked by the MTNs and the banks is lucky to be getting anything.
You seem to acknowledge that the combination of 5-year notes, 10-year notes, and common shares will have a market price on day 1 less than 100% of the par value of the MTNs. You refer to this as illiquidity or "the fact that there's no immediate market for a security".
But there will be a propertly functioning liquid market for all three securities on day 1. And the market price will be less than 100% of the par value of the MTNs.