Replies to post #13559 on Lehman Preferred Series "J" Preferred (f

[daktok]

Slimugrian, that is THE question. I read the report over and over and it did not say either way. Do you see it? Which company -- LBHI or Archstone? If it's Archstone, then it's crisis over. Back to normal business. But if they are converted it to Lehman preferred shares, then it is as I said. The downside of that is there is also no good news on our end -- like LORTAP said, that it's saying that there will be A>L by at least 5.2 billion.
Another question that pops up in my mind is this: LBHI owns less than 51% of the company, so it may not have controlling interest in Archstone. If that is the case and Archstone will put it into it's own preferred, then why involve Lehman at all? Perhaps Lehman is meddling, but if Lehman doesn't have controlling interest, then it can't wrap up the debt into Archstone -- however, it could wrap up the debt into Lehman prefs.
I'm sure time will tell. We'll just have to watch for this one.

[daktok]

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.