Lehman Brothers Financial SA (LEHNQ)

[SwissCheeseAccount]

https://www.educba.com/debt-equity-swap/

ABC Limited is under a debt obligation of 1 million dollars. The company is in the hospitality business and due to lockdown in the region, the company is unable to pay interest payments which have mounted on account of no revenues. The company foresee the loss of business for the next year as well and decide along with its lender to undertake a Debt/Equity Swap under which the company will extinguish the 1 million dollars and instead of that will issue 0.1 million shares fully paid $10 each to the lenders.

https://www.aciclaw.org/news/2019/mid-atlantic-update-in-re-lehman-brothers-holdings-inc/

The substituted preferred stock would be “fully-paid non-cumulative preferred stock issued directly by LBHI bearing a right to dividends calculated in the same manner as the [ECAPS], having no voting rights (except as required by law).” Pursuant to the LBHI charter in effect prior to the petition date, LBHI was authorized to issue such preferred stock, with over 17,000,000 shares available for issue.

Who will receive the $60billion fully paid non-cumulative preferred stock in exchange for their debt is the question. Could be everyone, could be nobody. You never know

One thing is for certain, there is gold at the end of the rainbow.

Things to keep in mind:

1) $60billion value of these shares is only the nominal value. The market value for these could rise exponentially or drop, my opinion is they will rise if LBHI goes forward as a going concern and raises cash.

2) Barclays (owner of Lehman’s IP) is a big bank with over €1trillion in assets who’s new CEO stated they are vowing to build off the strategy of the former Barclays CEO of expanding both retail banking operations in the U.K. and a trans-Atlantic investment bank that includes the former U.S. operations of Lehman Brothers.

3) BNY is still the trustee for CT’s.

4)LBIE is expected to continue as a going concern. LBHI is the sole shareholder of LBIE.

5) Lehman brothers is still a big name and the name alone is valuable IP.



Do your own DD.

GLTA :)