Comments on Distressed Debt Investing: Advanced Distressed Debt Lesson #4

>>1. unsecured are ONLY entitled to 100% ...

2009-12-31T18:25:30.322-05:00
>>1. unsecured are ONLY entitled to 100% of claim..Judge will throw away anything beyond that

no. see "note: postpetition interest on unsecured claims in the case of a solvent debtor in the usc law review"

>>Is the debtor considered solvent in the equity sense? Outside of this, a give up between bonds, and pre-petition accrued interest, I dont see why unsecured should be taken out at par + accrued (then again I havent spent anytime on GGP). I have heard of, but never dealt with, situations where the debtor is considered solvent.

see the fremont general case - kccllc.net/fremont general

>>Given your experience in distressed, how 'common' has it been (post 2005) to terminate exclusivity periods? (went through your post on Sixf)

see the fremont general case

Is the debtor considered solvent in the equity sen...

2009-12-31T16:29:23.600-05:00
Is the debtor considered solvent in the equity sense? Outside of this, a give up between bonds, and pre-petition accrued interest, I dont see why unsecured should be taken out at par + accrued (then again I havent spent anytime on GGP). I have heard of, but never dealt with, situations where the debtor is considered solvent.

Also, interesting you noted that "Once exclusivity is done, they could propose their own plan.."

Given your experience in distressed, how 'common' has it been (post 2005) to terminate exclusivity periods? (went through your post on Sixf)

2009-12-31T16:09:30.162-05:00
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GGP is not solely dependant on Simon/BAM or the ex...

2009-12-31T10:27:32.112-05:00
GGP is not solely dependant on Simon/BAM or the existing unsecured to raise capital. The capital markets for REIT stocks are doing extremely well with 35bil raised in 2009. Simon, trades at implied cap rate of 6.7%.
Considering that GGP would be relisted and eventually have to be part of REIT mutual funds, wouldn't there capital market arbitrage funds interested in a private offering from GGP while it is still to be relisted ? They could buy equity now at say 6.9% cap rate and then offload it months later to a REIT mutual fund at lower cap rate..pl let me know your thoughts ...
http://seekingalpha.com/instablog/397913-sudhi-analyst/41460-general-growth-rebutting-shorts-thesis-part-2

what you are missing in your analysis 1. unsecured...

2009-12-31T09:46:42.839-05:00
what you are missing in your analysis
1. unsecured are ONLY entitled to 100% of claim..Judge will throw away anything beyond that
2. With its nearest and closest peer trading at 6.7% cap rate in capital market, why wouldnt they be able to raise equity closer to that rate (say 6.9%) when all secured debt is extended ? Wouldnt there be arbitrage hedge funds will to buy this stock with the intent to sell this in the market to REIT mutual funds, soon upon relisting ?
wouldn't REIT mutual funds who own Simon want to own more of the under valued stock ?

http://seekingalpha.com/instablog/397913-sudhi-analyst/41460-general-growth-rebutting-shorts-thesis-part-2