Re: Stop Spamming!

Suzieflame wrote:
> 'Menjy' wrote:
>>Suzieflame wrote:
>>>'Menjy wrote:
>>>>J. Raoul Xemblinosky wrote:
>>>>>'Menjy' wrote:
>>>>>>Suzieflame wrote:
>>>>>>> 'Menjy' wrote:
>>>>>>>>Nugent Dirt wrote:
>>
>>[...]
>>
>>>I was in a meeting last week where some financing thing came up at 9%
>>>above LIBOR for a fairly high risk situation. I thought that was
>>>pretty cheap, given that their pref shares were getting like 5% over
>>>and the debt quality was somewhere around B/CCC. Can you guess how
>>>they managed the risk?
>>
>>The guys who were lending the dough? Well, I never went to business school,
>>but the only hedge I can think of would be shorting the debtor's shares.
>>
>>Am I anywhere close?
>
>That or a put option would be good short term hedges, but it's not
>publically traded in this case,and the debt was over 2-3 years.

Actually, I was wrong. A put would be a good hedge, a short wouldn't. But
anyhow...

>They went in the other direction. They wanted a 1% chunk of the exit
>price as a "final fee", as-and-when, as upside, instead of a few extra
>% points on the debt today. They had no interest in carrying equity. I
>guess you could say this is somethind similar to a PE/VC fund's
>carried interest.

This I don't get, I'm afraid. Never got involved in corporate finance, prolly
as I never went to business school. Let me get back on this when I've done
some reading up on how PE/VC funds work, and what the hell an "exit price" is.

Don't have a current email addy for you, by the way. Wouldn't mind one. I'm
first initial full surname at biggest frog commodity trader in the commodity I
trade the most often dot fr. Or markb*****k at orange dot fr. Let's see which
gets there first, if either.

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T H E R E I S N O K N I T T I N G C I R C L E
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TINKC Member No. 00001 -- AHWW Bellower N?55 -- mhm 20x8

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