RE:RE:RE:RE:Switch For every 100k in face (cost only $56k on the offer), they earn $8k in cash interest annually or $4k every six months. With the accretion debentures, my understanding is that you get 11.04%/year compounded semiannually based on the total of accretion debentures you already own plus the debentures you own. So I think in December, 100k in face value bonds should produce another $5.5k of accretion debentures and then in June it would be another $5.8k in accretion debentures.
puppymonkeybaby wrote: Thanks Method. could you now explain the accretion debs and how they work? I like how you show your math. It makes it easier to understand, since my intellect is comparible to a baboon.
Method wrote: Even ignoring the accretion debentures it still makes sense on a cash basis. The accretion debentures won't see any cash flow until 2023 so, I'm ignoring them but they are material.
The remaining debentures have an 8% coupon beginning in January so let's just use that for ease of calculation.
8/58 = .138 multiplied by the amount you want to invest, i.e. $100,000 = $13,800 in interest.
puppymonkeybaby wrote:
Method wrote: I still think it makes sense to feed your common to the buyers and switch into FIRE.DB. It's like paying 17 cents for the common but you get over 2 cents/share equivalent in cash interest in a year without factoring in the accretion debentures.
Better for long term investors vs short term traders.
Lets use round numbers.
Whats $100,000 at $58/debenture pay per year in interest?
I'm confused about the how the debentures compare to the accretion debs.