Looking at some of the interest rates in the credit market right now:
CNQ, which has a market cap of $33 billion, just priced some debt at 2.89%.
STX, which has a market cap of $15 billion, recently priced some debt at 4.75%.
ELN, which has a market cap of $6 billion, just priced some debt at 6.25%.
TCKGY, which has a market cap of $2 billion, just priced some debt at 7.75%.
So the good news here is that INFN is obviously seen as a high grade credit if they are able to sell debt at a yield of 1.75%. Obviously this debt sale has trashed the stock price, at least temporarily. Hopefully this will turn around once the company discloses what they plan to do with the money.
"So the good news here is that INFN is obviously seen as a high grade credit..." Ouch, this is such an erroneous and misleading statement. You can't compare converts to regular debt. At best, INFN is a B-range credit risk on the S&P scale . It is certainly NOT a high grade credit.
I think the thumb downs are due to apple to orange comparison of the rates. Those other companies already have debts on their books and perhaps not convertible ...
As I said b4, it is time for INFN to shine unless management screw up big time. Time will tell whether this is a good move.
I have observed 2 companies in the dotcom era. One issue debt of $500mils while the other sold 10 mils shares for $1 BIL. The one which issued debt went BK within 3 yrs, while the other one is still around but never made any profit since raising that $1 BIL...