Chemtura Corp (fka CHMT)

[Madclown]

Still around and still holding large positions in Chemtura and Tronox. The price action in both is tied to macroeconomic concerns. Chemtura is largely held by funds. With the global markets rolling over there are margin calls coming into the world of funds. Many funds will seek the security of cash and this often creates buying opportunities for those with a longer term horizon. Credit spreads are widening between risk-free bonds and hi-yield debt. Credit is not flowing right now and that creates panic and fear in the markets. The positive thing for Chemtura is that the parties who would back a rights offering from the equity side made their bets long ago and are less likely to pull up stakes. The funds involved that represent the EC that proposed the rights offering in the first place are "over the wall" and cannot sell out so their bets are placed and they are entrenched and will be in this for the long haul.

The question is will the Debtors support the EC rights offering? My bet is that they will given that their posture has changed dramatically in the last few weeks. They have shifted from telling the court that they "don't see any equity recovery" to now issuing a press release saying that there may well be recovery for equity. That is a huge shift in sentiment for anyone who has been following this and paying attention. Just realize that what the company said about equity is about all they can say at this time. Until the disclosure statement and POR are released and the signatures of the funding sources are on the dotted line they will not be able to make any stronger statements about equity.

Just continue to watch the bonds as they are often the best arbiter of value.