While that is extremely sweet and generous, sadly I have to decline. Only your life will do...Quote from Wolfgang1756:
If you tell me I will give you MONEY! A PayPal 'donation' will be on its way to you...
Convertible Bond Trading?
- Thread starter Wolfgang1756
- Start date
Have it your way then 
I bet you got this info from this Bloomberg "terminal" or whatever!
So what is this "terminal" anyway? Let me guess, a special part of the web site where you have pay a monthly subcription for so-called "premium" service??? Wow! Big deal!
Sorry but I refuse to pay for something I can get for free... I bet I can that info for free on the web with a bit of searching around...
And why should I pay $10-20 per month or whatever they charge for a premium service anyway. The basic Bloomberg web site is crap anyway. Its only good for news and stories. The data is crap compared to Yahoo Finance or Google Finance... I can't imagine the premium site being much better...
I bet you got this info from this Bloomberg "terminal" or whatever!So what is this "terminal" anyway? Let me guess, a special part of the web site where you have pay a monthly subcription for so-called "premium" service??? Wow! Big deal!
Sorry but I refuse to pay for something I can get for free... I bet I can that info for free on the web with a bit of searching around...
And why should I pay $10-20 per month or whatever they charge for a premium service anyway. The basic Bloomberg web site is crap anyway. Its only good for news and stories. The data is crap compared to Yahoo Finance or Google Finance... I can't imagine the premium site being much better...
it's rich,and by a fair bit,though i didn't see the conversion amount,what was it??
If Rates move up and the market/stock price drops,i think it will take a big hit.
you'll see this trade below 70 in the next 3 years,just my opinion.,and not trying to pick a fight.
============================
"Yes, this is for the INTC 2.95% 12/35 junior subordinated convertible debentures...
Good luck with your quest... Just out of curiosity, imagine I am a broker that can deal in these for you and I can offer you some at par. How would you go about deciding if this is cheap or rich?"
If Rates move up and the market/stock price drops,i think it will take a big hit.
you'll see this trade below 70 in the next 3 years,just my opinion.,and not trying to pick a fight.
============================
"Yes, this is for the INTC 2.95% 12/35 junior subordinated convertible debentures...
Good luck with your quest... Just out of curiosity, imagine I am a broker that can deal in these for you and I can offer you some at par. How would you go about deciding if this is cheap or rich?"
31.7162 per $1000, according to the prospectus...
31.7162 per $1000, according to the prospectus..."
thank you,
Yep,50% conversion premium, that's way too rich for my tastes..
So.
1) interest rate too low
2)conversion premium too high
3) bond is too long
4)Management is issuing these bonds and similar ones to buyback common stock,and leverage the earnings.
If the company does well then they are buying in shares here and will re-issue at a 50% higher price..if they run into problems then they have a very low interest rate loan.Management is arbitraging their own stock...
How did i do on my evaluation???
regards,p1976
thank you,
Yep,50% conversion premium, that's way too rich for my tastes..
So.
1) interest rate too low
2)conversion premium too high
3) bond is too long
4)Management is issuing these bonds and similar ones to buyback common stock,and leverage the earnings.
If the company does well then they are buying in shares here and will re-issue at a 50% higher price..if they run into problems then they have a very low interest rate loan.Management is arbitraging their own stock...
How did i do on my evaluation???
regards,p1976
I am inclined to agree with your assessment, esp in light of what's been going in the mkt.
"Well the yield is 2.95% which is less than the T-Bonds for that maturity by about 1%. However there is a call option thrown in for free, so that sweetens the deal "
That call option ain't free...the straight bond would be about 7.75% so that's 5 % a year you are "paying" for the right to buy the stock at a 50% higher price than right now...
Heck,i'll sell you some right now at a 50% mark up and you wont have to wait 25 years.
regards,P1976
That call option ain't free...the straight bond would be about 7.75% so that's 5 % a year you are "paying" for the right to buy the stock at a 50% higher price than right now...
Heck,i'll sell you some right now at a 50% mark up and you wont have to wait 25 years.
regards,P1976
an interesting exercise would be to value out the convertible debenture components synthetically..i think you would be surprised at the numbers..