i know quite a bit about munis. the recovery value ona city GO- in the very rare case of default- is usually 70% or better.
therefore, if AMBAC isnured 600MM chicago, and an extarordinary event happened and it defaulted, a worst case woudl be 200mm exposure. AMBAC has 7 billion in claims paying ability. it would be 6 monts earnings to cover the whole hit- so dont misunderstand the exposure or loss potential. detroit Unlimited tax GO's paid back 74 cents on the dollar as an exa
hey mr.phil- I am a bond specialist and trade transocean all day. I have been a bond specialist since 1991. the cusip is 893830AT6. coupon is 6.8 due 3.15.2038. market is 79 bid 81 offer today. There are also some 6% bonds due in 2018 at 97 bid 99 offer range. Those that tell dont know- and those that know dont tell.
they have 2 billion in bonds coming due in 2016 plus will be burning cash every quarter until oil rises.
rig bonds are trading at discounts and at super high yields compared to regular corporates. 6.8% bonds are at 81 cents on the dollar to yield over 9%.
the bond is senior debt and cant be deferred and the preferred stock can stop paying if they hit hard times. I am second thinking that I may be better off owning the bond. this rout could last longer than anyone thinks and low gas prices for years could really hamper cash flow. recovery value in chapter 11 will be very good for bonds and not so good for preferred so it may be wise to take less yield and own the bonds. the ceo sounded very confident but I have heard that before. good luck to us all !
I agree but when a stock plummets 8 points on no news- and I have been around awhile- it is usually disastrous, I carefully examined the investor presentation PDF, and I cut the asset values in half just in case, and bought the shares. Too many times I have been burnt by "restatements" and accounting irregularities so I was concerned this was just such an occasion. the conference call was good. I have been on many calls where the CEO said one thing and did the exact opposite a few weeks later so I take that with a grain as well. I aslo bought quite a lot more than I am comfortable with and will pair back on any strength over 35.
I am a bond specialist for 22 years and current yield- which you referred to , is very different than yield to maturity. You cannot figure yield to maturity that way. you need a bond calculator. but current yield is what I quoted. I did buy some series d preferred at 23 and I feel good about it. it has a par value of 50. it is like buying a bond at a 46 dollar price with an 8 coupon.
there is conviction and there is mayhem. a gamble is to buy the common. buy being in the preferred, I thought It would be less volatile.
since the preferreds have plummeted- someone knows what the call is about and it aint good. I own 1000 shaers at 35 of preferred D and it has fallen 15 points in a week. now I know why. something not good is happening and people in the know got out. this is what is wrong with the system. frought with insider trading and rarely does anyone get caught. I am down 15K in a week on this #$%$