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If you didnt get in yet consider HECHH the 5.5% bond of 2012. I have been holding for a year and recently bought more. My rationale as a bond holder was that a probable scenario was a continued slide in sales but intermediate term continuation of dividends based on relatively solid balance sheet and sufficient cash if one adds back in depreciation to negative earnings. In case of foreclosure my estimate was 20 cents on the dollar and the bond was trading at 28 cents on the dollar. Now with buyout the bonds should be redeemed, hopefully at par. The dollar figure quoted in the press will pay about 130 million to stock holders and 370 million to debt holders. If the deal collapses the bonds will probably collapse from 44 back to 27-28 which is less risk than the stock going from 2.75 to 1.5. I received no callback from the company and need to check the provisions of the identure but most of the time there is a provision that bonds are redeemed on change of control.
Mergers anyone hear of rumors | Stock Discussion ForumsShare