Words of Wisdom

Category Archives: Debt Securities

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Hail, Hail Freedonia: Frequently Asked Questions About SEC Registration on Schedule B by Foreign Governments

In the Marx Brothers’ movie Duck Soup, the finances of the mythical and bankrupt country of Freedonia depend on continuing loans from the wealthy Mrs. Teasdale (played by the unflappable Margaret Dumont). For her part, Mrs. Teasdale insists that Rufus T. Firefly (played by Groucho Marx) be named as Freedonia’s leader. It apparently never occurs … Continue Reading

Bond Mechanics 301

We conclude our overview of bond mechanics with an examination of a few complexities associated with tack-on offerings. Tack-on deals are often viewed as so easy that they can practically run themselves. And yet, there a few nuances that can really gum up the works if you’re not a Ms. (or Mr.) Goodwrench.… Continue Reading

Bond Mechanics 101

Over the next few weeks we’ll be discussing mechanics.  Not the fix-it types down at the local Gas-n-Go, but bond mechanics.  After mastering these topics, your next deal will run like a well-oiled machine. First, we’ll deconstruct (and inspect, oil and then re-assemble) several important timing and calculation issues that commonly arise in bond deals.… Continue Reading

Securing Unsecured Notes (Part II)

Previously, we described the plight of Mr. Wonka and his company, WWCC, a global candy maker and high yield issuer that has fallen on hard times. Mr. Wonka is absolutely thrilled with your proposal to have WWCC grant an “equal and ratable” lien over the factory in favor of WWCC’s outstanding notes. This will allow … Continue Reading

T3 – Rise of the Trust Indenture Act Filings in Section 3(a)(9) Exchanges

Your good client John Connor is on the phone. John–a somewhat paranoid guy, if truth be told–is convinced that Skynet, Inc. is planning to take over, and terminate, his company. John’s complex survival strategy involves a Section 3(a)(9) exchange of securities, in addition to all sorts of pyrotechnics, motorcycle chases, and a bodybuilding governor named … Continue Reading