Something definitely appears to be driving the bonds at an accelerated pace. "If a bond’s actual interest payments will be greater than the interest payments expected by the market, the bond will sell for more than the bond’s maturity amount". This is the case for the 2009 bond. The market currently is dictating a much lower interest rate for these types of bonds than it did when Chemtura orginally issued them. With the fed signalling that they intend to keep interest rates low for some time it is no wonder investors have found Chemtura bonds attractive.
Are Chemtura bonds just an attractive investment right now, maybe, however I'm more interested in what is driving the increased interest in these bonds all of a sudden. Is paying of these bonds imminent from an asset sale or refinancing? Something that rarely gets mentioned is maybe there is a possibility of a new issue of bonds at a lower interest rate, and using the proceeds to pay off the old bonds.
Something has spurred on the buying of Chemtura bonds and I think it is more than the just the notion of a decent return. Bondholders must have been given some assurances by Chemtura that we are not aware of, otherwise why would bond traders be demonstrating such confidence in the bonds by buying them up at such an accelerated pace if not for a sweetened deal made to them already by Chemtura. By buying up the bonds they are trying to exert control over the reorganization process, and it appears they have succeeded, because the acceleration of buys tells me Chemtura "already" has a deal in place for the bondholders.
CEM MM is exactly right, the bondholders are trying to take control and I think they have already succeeded!
