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MOTORS LIQUIDATION Message Board

  • bond_gm.bond bond_gm.bond Oct 12, 2010 7:49 PM Flag

    How much will the $25 Bonds be be worth after the IPO?

    This question is for Daisy or anyone that thinks that they have the following figured out:

    1) Is there any accurate information on how many $25, $100, and any other denomination bonds that are waiting in line for the new GM shares?

    2) How many shares will be issued to Motors Liquidation to distribute to qualified debtors?

    3) Will those shares go through a reverse 4 for 1 split before they are distributed?

    4) If the IPO is for $133 per share as the article from the link below implies, will the new shares be worth ¼ of that?

    5) Assuming that all of the “10%” of new shares that ML were issued is distributed to the bondholders, how much do you think that the shares exchanged for each of our $25 bonds will be worth, and state if you are including the value of the “15%” of warrants if exercised, minus the cost to exercise them.


    TIA

    GM Bond


    http://finance.yahoo.com/news/GM-workers-get-chance-to-buy-apf-567740793.html?x=0&.v=4

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    • The $25 bonds closed at a price of about $8 at the end of Wednesday's trading, according to FINRA. You can get their current price by going to the FINRA site, which is

      http://cxa.marketwatch.com/finra/BondCenter/Default.aspx

      and entering the CUSIPs of the $25 bonds. For example, GMS is 370442121 and GRM is 370442691.

    • I got an error on the other link this one may work.

      http://www.worldclassconsultants.com/GMRetailBonds.xls

    • Threads like this are extremely rare and make this board (lately full of crap) still worth reading.

      thx

    • #s 3&4, if the stock is split 4 for 1 then you will get four times as many shares [240,000,000 will be given to the cresitors]. The warrants will also be adjusted, 4 shares for $30 and 4 shares for $55.

    • GM S-1 filing est. the total debt to be converted to be over $37B. This means that 10 million shares will be added to the conversion or a total of 60,000,000 shares will go to the creditors.

      When the final debt number is given, divide that number by 60,000,000. Then divide this number into the total amount of debt that you hold and round down.

      This will give you the number of shares owed you. You can do the same for the warrants.

    • Hi bond_gm,

      Here is the info I have:

      1) Motors Liquidation in its latest monthly operating report mentioned $28,356,000,000 worth of bonds debt. (I assume this amount includes accrued interest until 1st June 2009). Look for those 8-K monthly reports at sec.gov.

      2) To be distributed to creditors: 50 million shares (or 10% of the initial total of 500M). If you factor in the warrants, a total of 140,909,090 shares.

      3) There is a rumor of stock spilt prior to IPO. Steve Rattner (ex car tzar) mentioned it during a recent interview.

      4) Your question number 4 refers to stock spilt? In that case yes, there is a rumor of pre-IPO stock split.

      5) Your question 5 is all about valuing the new GM. To calculate the % of recovery, this is the calculation I now use:

      Total Liabilities subject to compromise (LSTC) means total claims against debtor: $32,216,370,000 (once the court has finalized its work that amount will be closer to $35B and in this case you will need to tweak the calculation for the additional shares to be distributed when claims amount reaches a certain level).

      Total cost of warrants: $2,045,454,525

      Liabilities + cost of warrants = approx $34,25B

      Motors Liquidation has 140,909,090 shares to distribute (that includes warrants) out of total of 606,060,600 new GM shares. This is equivalent to 23.25% of market value of new GM.

      At IPO day (actually at the effective date of the plan of liquidation), you will be able to calculate the market value of new GM.
      Multiply the new GM market value by 23.25% (based on total 606,060,600 new GM shares) and you get the value to be distributed to creditors. You divide that amount to be distributed by the liabilities + cost of warrants (mult by 100) and you get the percentage of recovery. Maximum recovery possible is 100%. Beyond 100% recovery and something else happens.

      In March 2010, dfwmcse posted an excellent article that can be useful for you as well. The link in that post to an excel sheet for more detailed calculation is still valid.

    • I don't have any experience with this because I never bought any bonds, only stocks.

      I don't think Wall Street can legally exchange your bonds for something else, UNLESS you agree to exchange your bonds for something else. Chapter 11 is NOT a dictatorship. It is a bargaining forum. The parties must AGREE on a settlement.

      They can make you an offer. But if you DO refuse the deal, then, the bonds you have may stop trading because the short sellers REFUSE to buy them back at a higher price. If stocks and bonds stop trading then the broker may remove them from your account and put them in a "depository".

      Will the short sellers decide to buy the shorted bonds back at a later time? I don't know. If the short sellers don't buy back the securities they sold and din't own, they lose money. If the buyers of the shorted securities don't sell their securities back to the short sellers, the buyers lose money.

      The short sellers and the short buyers may BOTH decide to commit suicide. They both lose. "If I'm going down, you're going with me". I've heard that before.

      That's my interpretation of how it works.

 
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