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Re: AAA AAA post# 517490

Sunday, 04/07/2019 5:56:07 PM

Sunday, April 07, 2019 5:56:07 PM

Post# of 804281
Great idea. Everybody wins.


SEO leads to a large asymmetric information cost to the existing common shareholders. JPS has the higher priority to be paid. Thus, issuing new JPS can be less costly (pecking order theory) to the existing common shareholders. To sweeten the deal, Treasury can even cancel all SPS and make the newly issued JPS more senior than the current JPS.