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  • morganuci morganuci Feb 24, 2010 8:49 PM Flag

    What is SSRAP?

    What exactly is SSRAP? I inherited some of these securities, but I'm not sure what they represent. Sears Acceptance Corp's web site is completely blank, but in 2007 it appeared as: Is it still in business, as described at

    From what little I could find, it appears that SSRAP is a trust that holds Sears Acceptance's bonds, and it stopped reporting/being listed after Sears Acceptance did, since it had no way to get information from Sears Acceptance (
    It also appears that unit holders were offered a chance for liquidations in 2005:

    So the question is, where do the payments come from, and how can unit holders know how long they'll continue?

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    • By the way, if anyone wants to buy a par 25 quarterly bond issue that trades at a discount to the bond market bonds there are actually 2 of these in existence. I own some of each in addition to some SSRAP. These are delisted bonds (no trust structure as is the case for SSRAP). They are extremely difficult to trade (at least if your broker is etrade) but it is possible. The advantage of these is that since there is no trust, there is no risk of a forced saled at unfavorable prices immediately following a bankruptcy (when bonds often trade at their lowest).

      Check out CUSIP 812404408 and CUSIP 812404507. These used to trade as SBCKO and SBCKP before they were delisted. You can find a description and link the the prospectus for each in under those symbols. Etrade will allow me to sell (which I'm not) but won't take buy orders for them. They suggested I contact the book runners for the issue directly so I bought SSRAP instead. Those with a better broker than Etrade might want to look at these issues. Be prepared for your broker to first claim they don't exist. If you check FINRA bond data you will see that they are traded fairly actively somewhere.

    • In the case of SSRAP, it definitely would be liquidated in the event of a "Security Default" or bankrutcy (hopefully this is information we won't need to know). From the prospectus:

      redemption of the Securities.

      Termination ..........................A Trust Wind-Up Event will occur
      upon (i) redemption by the Security
      Issuer of all Securities held by the
      Trust, (ii) exercise of the call
      rights under the Swap Agreement as
      to all Securities held by the Trust,
      (iii) a Security Default

    • How the trust gets handled in a bankruptcy is an interesting question. I believe it varies from issue to issue. For example in the GM bankruptcy I had some CCYPQ that traded well (and quite profitabily) into the bankruptcy process. I didn't hold it until the entire process was complete, but it certainly didn't liquidate upon bankruptcy or anytime soon thereafter.

      With Delta airlines, if I recall correctly there were two nearly identical trusts. One liquidated and one didn't.

    • go to and enter ssrap and you will find out all about it - next follow the link to the original prospectus

      • 1 Reply to afzalraza1
      • I've read that material. I see nothing other than that Sears Roebuck Acceptance Corp. is the issuer of the bond. The prospectus states:

        "According to its public reports, Sears Roebuck Acceptance Corp. (the
        "Security Issuer") is a wholly-owned finance subsidiary of Sears, Roebuck and
        Co. ("Sears") that was incorporated under the laws of Delaware in 1956. To meet
        certain capital requirements of its businesses, Sears borrows on a short-term
        basis through the issuance of notes to, and in the past sold receivable balances
        to the Security Issuer. The Security Issuer obtains funds through the issuance
        of unsecured commercial paper and long-term debt, which includes medium-term
        notes and discrete underwritten debt. All of the Security Issuer's outstanding
        common stock is owned by Sears, which will not guarantee the Securities."

        So, the underlying securities are clearly NOT an obligation of SHLD, the successor of Sears.

        I did find the CUSIP of the underlying bonds, 812404BK6, which enabled me to look them up at They're rated BA3 by Moodys and BB- by S&P, which is in the bottom of the non-investment grade, speculative rating level. A drop of one notch would put them into the highly speculative rating level. This is, not surprisingly, the same ratings shown on for SSRAP shares.

        The good news is that the issuer was removed from negative credit watch by both ratings agencies about a year ago (click on the "Yes" next to "Issuer Events" on the Fidelity page linked above).

    • best description is on - its a great yield as long as sears remains viable - if sears goes bankrupt it is still better to hold ssrap which is sears bonds rather than shld the common as most likely sears assets will be sold to distribute to creditors or it would emerge from bankruptcy with the common wiped out and the creditors as the new equity holders

      • 1 Reply to afzalraza1
      • I don't see anything that indicates that SSRAP holds direct obligations of SHLD. Everything indicates that the trust holds bonds of Sears Roebuck Acceptance Corp ("SRAC"), a subsidiary. That matters because SRAC could declare bankruptcy while SHLD continues on---that's why they create such subsidiaries, to be a sort of financial firewall.

        That said, SRAC loans to Sears, now part of SHLD, so as long as SHLD is paying its debt, then SRAC *should* be able to pay its longer term debt, which makes it to the SSRAP shareholders. But if management at SRAC screws up, perhaps by buying mortgage backed securities :-), they could go BK while SHLD was unaffected, and it would definitely affect SSRAP shareholders.

        That said, this press release:
        implies that Sears is the guarantor of the debt of SRAC.

    • sanders2307 Feb 25, 2010 1:15 PM Flag

      SSRAP is Sears debt. Sears makes the payments. I think it comes do in 2032. They should be able to continue making the payments at the beginning of every June and December until then.

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