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Select Medical Holdings Corporation Message Board

  • Englishlaw Englishlaw May 8, 2012 12:21 AM Flag

    Help me understand this

    SEM sells bonds (Borrows money) to pay off debt and the stock goes up. So in effect they replaced old debt with new debt. I'm not complaining, I just don't get it?

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    • Benefits: if they refinanced and the terms got better for SEM. EG, if they they had a rate of 9 %...but now it is 7%, they owe less over time. Rates have come down. Also, because the rating services have, quite dramatically, raised the ratings of SEM and their bond ratings, they can find many more people and companies who will take a lower int. rate from SEM because they are stronger. And maybe SEM will buy some too..for many reasons. The key thing to always keep in mind is that R is a very good at takeovers, being taken over, going public, then private, then public. All the top people make a bundle each time they make a big move. The thing that they want to do is SELL the company, or somehow merge it, so again, they all make alot of $. You never know if takeover rumors are correct. But there are signs. And in the long run, something will happen.

 
SEM
13.38-0.21(-1.55%)Apr 29 4:02 PMEDT