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#1
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Re: How dodgy is the Citibank-Abu Dhabi deal?
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#2
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Re: How dodgy is the Citibank-Abu Dhabi deal?
Thanks. From what i see this high coupon was designed to deduct taxes. However isnt the revenue from selling an option taxable? Thus the although the 11 percent is tax deductable, the 8 percent they receive on options is taxable so why not just pay out a 3 percent coupon?
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#3
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Re: How dodgy is the Citibank-Abu Dhabi deal?
There are a few big differences in the issues
1) The citi issue is a mandatory convertible to common shares and the CFC issue is not. More risk on this citi convert to the equity downside. So this isnt really a loan, its a equity issuances as the money will never be repaid in cash, just shares of Citi 2) The CFC convertible price was below market value at the time of issuances and the citi is at a varabile convertible amount but all above current market price. 3) Abu Dhabi had to sign a lockup agreement not to buy more or short C shares. BAC could have just shorted enough CFC shares to hedge their investment SteveOMS |
#4
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Re: How dodgy is the Citibank-Abu Dhabi deal?
[ QUOTE ]
There are a few big differences in the issues 1) The citi issue is a mandatory convertible to common shares and the CFC issue is not. More risk on this citi convert to the equity downside. So this isnt really a loan, its a equity issuances as the money will never be repaid in cash, just shares of Citi [/ QUOTE ] The CFC money will never be repaid to BofA either. [img]/images/graemlins/smile.gif[/img] |
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