In the restructuring, Lehman wants to swap $5.2 billion of loans used to fund the buyout into preferred equity interests, which would be senior to existing preferred and common equity, according to court documents filed on Thursday.
Let's analyze this for a moment:
Lehman wants to swap $5.2 billion of loans
Lehman is the main subject here.
What does Lehman want to do?
swap $5.2 billion of loans used to fund the buyout into preferred equity interests
What will be the result?
(The new) preferred equity interests, which would be senior to existing preferred and common equity
Obviously, it would be put over preferred and common equity. This is the billion dollar question...Archstone or LBHI. I don't know anything about Archstone. If someone found out that Archstone doesn't have common or preferred stock, then that would answer our question right there -- that they're are talking about converting into Lehman.
To me, the plain reading is that it will be converted into Lehman. Others on this board read it the same way. In fact, until you stated that, it didn't even occur to me that it could be otherwise.