Replies to post #24358 on Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

Why shouldn't the Lehman Estate do this before the last payment of the POR?

Lehman Brothers should buy back as many CTs as they are allowed to, to reduce their future expenses related to redeeming or servicing the CTs. The CTs 6% interest rate is much cheaper than their 14.5% current cost of capital. Heck, Lehman Brothers could reissue or sale their held CTs to raise capital in the future.

[hestheman]

I know that the 5 percent rule applies to reg preferreds and commons....but could there be some kind of an exception as it partains to CT's because of their hybrid equity/debt? Remember, the 5 percent rule DOES NOT apply to debt. I think that may be what the case is here although I am not 100 percent positive. If so...Lehman could indeed be buying these back and it looks as though they are being slow and calculated about it.