Another picture - $50m 6% Debentures vs $50m common sharesPerhaps this has already been discussued, but may be not, based on the last few posts.
The difference in cost/ dlution is not that large after adjusting for the 6% interest paid. If you were CEO, what would you rather have on the BS? $50 more debt or $50m more equity?
One sobering possible reason for QTRH's debenture choice is that raising equity any where near $2.80 (or at say a 10 to 15% discount) was simply not doable. Perhaps even if new common shares were sold at say $2.40 to 2.50, RJ was unwilling to do a deal, or at least do a bought deal.
If this guess is correct, then others' guesses that instutions want QTRH shares but simply cannot find sellers/ supply is wrong.
Debt on the other hand is a different story. 6% yield with some protections for investors bring in many types of buyers/ RJ clients.