The above chart on Charter Communiation 10.375% 2010 bonds provides a pretty compelling case for some of the deep value opportunities that were created as traditional high yield investors ran for the exits last November. Despite the company filing for bankruptcy yesterday (a suprise to no one who followed the credit), the bonds have rallied from a low of 28 to nearly 80 cents on the dollar. Pretty remarkable given how there has been almost no fundamental change to the story over the last 2 months!
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didn't charter announce a plan to exchange the bonds into new bonds/equity in a prepack bankruptcy vs ppl earlier thinking that the bonds would probably be worthless if the company filed?
ReplyDeleteI am not sure the bonds would have been rendered "worthless" if the company filed, but i imagine the market appreciated the greater certainty provided by a prepack.
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