Replies to post #16533 on Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

More analysis on Class 10B TRUPS

All of class 10B has a value of $10.343B claim. Therefore, the reallocation for all of class 10B to higher classes 3,4A,4B,5 is:

$10B x 20% payout = $2B paid to higher senior classes.


Risk Analysis: If the BNYM took hold of the class 10B subordinate note after TRUPS default, the impact could be as high as $1B for senior classes 3,4A,4B,5 because of where the Debtors current payout exist so far today $33B.

Now, $500M compared to $1B is not so bad for Matthew Cantor EVP to evaluate?

If the BNYM took control of the subordinate note, the remaining $1B would be enough cash to pay the TRUPS face value. Well, a return of 10% on the $10.343B class 10B claim amount. $2.50 for TRUPS. LOL

Make TRUPS an offer before xmas? LOL


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Lehman Brothers may be the first company, still in the process of paying off its BK plan, to have its TRUPS go into default after 20 quarters of deferred dividends. If so, this will be a trend setting case on how TRUPS in default are treated in future BK cases.

My recent thoughts on TRUPS: When the POR class 10B reallocation reaches 20% of TRUPS face value ($1.2B claim) it would be at $240 million for Senior class 3,4A,4B,5. The TRUPS deferred dividends will be at $500 million at 20 quarters. A 2:1 payout. This will be some decision for Matthew Cantor, EVP?

[hestheman]

I was thinking a while back that Lehman was the first company the default would occur with, and while under bankruptcy you are right, this will be a trend setting event in how TruPS are dealt with (which is why unfortunately, we don't have any cases to compare it with on an exact basis). I will look up TG's post on other financial obligations. From reading the subnote indenture yesterday, it seems as if they have made provisions to pay senior debt (on the one hand) but also pay "Other Financial Obligations" (on the other hand) as if they are two separate issues that they ARE going to pay (like one poster on here not too long ago referred to as a car payment). I am thinking that if this assumption is correct, it will happen after the initial terms of the POR are fullfilled (remaining 19.6B paid off) we will see. Thanks cotton.