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Old Republic International Corporation Message Board

  • in4long_term in4long_term Apr 23, 2009 8:31 PM Flag

    8% convertible senior notes

    Wow, down 1.77 today! The market sure didn't like ORI's public offering today of $275 million aggregate principal amount of 8% convertible senior notes due 2012.

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    • Question (serious-not sarcasm). As a bull on ORI, I ask myself whether I would lend money to ORI at 8% for four years, even with a conversion privilege, or purchase the stock at current dividend yield and price. Should there be a real estate bottom and actual turnaround over the next several years, wouldn't it be accompanied by inflation, rather than current deflation of real estate, and Higher interest rates (which would make disposition of the bond more difficult). Additionally; the purchaser of convertible bonds typically Shorts the stock as a hedge-which may account for the price drop(?) Where is my 'logic' wrong, please...Thanks, f/c

    • the_millionaire_next_door the_millionaire_next_door Apr 23, 2009 11:40 PM Flag

      Nor did they like another dud for an earnings report.

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