Anyone with access to the internet can watch the bond by going to FINRA (*just google it) then setting up a watchlist and adding CEDC.GA The last trade on the 28th was at 53.55. This is up from previous trades in the 40s but still indicates that the bond market perceives considerable risk.
Ok I think I found the reason for the discrepancy...The convertible notes due in March 2013 are senior unsecured, the $ 9,125% and Euro 8,875% notes due in 2016 [trading @around 67-69] are senior secured with several protection elements as "Negative Pledge", "Put @ 101 Change of Control", "Limit of Indebtedness", "Restricted Payments", "Restrictions on Sales of Assets". That means Tariko cannot restructure the unsecured convertibles without full consent of the senior secured note holders.
I guess the convertible note holders might have to swallow something as:
--accept a certain haircut
--accept shares instead of cash with total value well below pari
So at the moment I would feel more comfortable with the senior secured notes. They offer a nice yield and are in a strong position, since the recovery value in case of bankruptcy would be around 40-50 (according to S&P). In such case Tariko and the senior unsecured holders would loose everything, so bancruptcy should be out of question...even more out of question after the newly formed agreement between CEDC and Tariko. Jyske bank in their new study from 01/02/2013 mentioned that Tariko might try to negotiate to skip the "change of control"-§...I could live with that :-) If Jyske bank is right with this point, it might indicate that Tariko will convert into new shares at a low price which will move him above 50%.
I would not invest into the shares, at least not until knowing the agreement details including (looming) conversion price. In case it will be far below current price the shares might take another hit.
I own some Euro senior notes, but my statement should not be understood as buy recommendation!!!
It traded at 60 today (12:47). Of course there should always be some discount, but I think a price above 90 would indicate that the bond market perceives only a little risk. For example the GMXR bond that had traded around 50 is now trading at 98 (This bond matures on Feb 1) At 60 the buyer of our bond makes 66.6% in three months or about 4 times that rate annualized. So 60 still indicates that there is considerable risk that the bond will not be paid off in full.