TSX:IBG.DB.E - Post by User
Comment by
CreditRiskon May 28, 2014 2:45pm
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Post# 22606619
RE:RE:Valuation and Thoughts
RE:RE:Valuation and ThoughtsThis is rich.
6-9% you think? really? Go into the credit market and see what you can get for 6-9%. You can buy billion dollar market cap companies with senior secured debt and $100 million + free cash flow. IBI's 5-year risk rate it where it is --> 25% because it's severely distressed and is potentially on the verge of a restructuring. If it was 6-9% they would go out and raise new money to take these bonds out and avoid all this, and I would avoid having to be depressed by how idiotic you and this other guy are. Cash equity investors like you are a joke. It is truly unbelievable to me that you said 6-9% along with your confused note on reinvestment risk. What do you do for a living? I would love to know and I pray it has nothing to do with the markets or finance. Do you even understand bond pricing?
Free cash flow only includes maintenance capex? Might want to double check that.
I didn't say the option has no value - I said it has very little value. I don't live in the world you do where option value is assessed based on just saying, "these guys could"...or "stock would be $10". The fair value of this bond and the embedded option is about $60.00 using a 50% volatility and 2,300 bps credit spread. Run that through your pricer if you have one.