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Alcatel-Lucent Message Board

  • bobbo64@sbcglobal.net bobbo64 Jun 3, 2013 10:08 PM Flag

    goldman $ach$ give$ no one,.............and i mean no one 2.3 BILLION..............without wanting with a 5/7 times return on their money...

    no one.............................

    Sentiment: Hold

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    • You clearly have no understanding whatsoever about the Goldman loan.

      ALU went begging to Goldman for a loan. Goldman took a look at ALU's balance sheet, saw that it was horrible, and decided that they required 100% collateral in the form of ALU patents for the loan.

      Having no other choice, ALU used their patents for collateral, plus are paying about 7.5% interest on the created bonds, which is a very high rate.

      Then Goldman PLACED the bonds created from the loan with interested clients.

      IT IS ENTIRELY POSSIBLE THAT GOLDMAN DOES NOT OWN A SINGLE ALU BOND, SINCE THE OFFERING WAS OVERSUBSCRIBED.

      Regardless, it makes ZERO difference whether or not Goldman owns some of the related bonds, or whether all of the bonds are owned by Goldman clients. This is because, with essentially 100% collateral, owning a related bond is pretty SAFE.

      Banking is a transactional based business. Goldman does not care about ALU. Goldman only cares about the quality of the transaction, and collecting its loan origination fee, which is probably in the neighborhood of $150M or so.

      THERE IS NO 5 TO 7 TIMES RETURN ON THEIR MONEY.

      If you want to know what Goldman thinks about ALU, you need only look at their equity research note on ALU....which is a SELL.

      In short, the LOAN business at Goldman is distinctly different from the part of Goldman that is responsible for EQUITY RESEARCH.

 
ALU
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