My IRA account has increased by 14.19% so far this year. This has been a bad year for me in the Junk Bond Market. If you have been following me for the past 4 years then you know that I have made far more money in the Junk bond market per year then I am making today. But everyone else is doing far worse than I am. At the same time, the Dow is up 3.53% for the year.
This year, I have had some disasters in my portfolio. However, I believe in riding out bankrupt companies until they get back on their feet. One such bond that I have is;
GREAT ATLANTIC & PAC TEA INC 9.12500% 12/15/2011 SR NT
The article below is from Reuters News Service. They report that A&P is about to come out of bankruptcy. I will probably get stock in the new company or a combination of stock and bonds in the company. I had the same situation with AINSWORTH LUMBER CO LTD a decade ago. Out of the new company, I received stock and bonds. Today, that investment is far ahead than if I just had the original bond until maturity.
***
Nov 3 (Reuters) - The Great Atlantic & Pacific Tea Co Inc , once the largest U.S. supermarket operator, said on Thursday it lined up $490 million of financing to enable it to emerge from bankruptcy protection as a private company early next year.
The debt and equity financing will come from Yucaipa Cos, an investment vehicle of billionaire Ron Burkle; Goldman Sachs Asset Management LP; and Mount Kellett Capital Management LP, an investor in distressed companies with offices in New York, Hong Kong, London and Mumbai.
A&P, as the Montvale, New Jersey-based grocer is known, said it plans to file a Chapter 11 reorganization plan before Nov. 14 to reflect the new financing and keep its 336 stores in seven U.S. states open while in bankruptcy.
The investment provides "solid financial backing from sophisticated investors who know our company and industry well, and who also share our vision for A&P's future," Chief Executive Sam Martin said in a statement.
"Upon receiving court approval and exiting bankruptcy, the company will be owned by The Yucaipa Companies LLC, Mount Kellett Capital Management LP and investment funds managed by Goldman Sachs Asset Management, L.P.," A&P spokesman Marcy Connor told Reuters.
A&P, founded in 1859, filed for bankruptcy protection last Dec. 12 after struggling with too much debt and competition from retailers such as Costco Wholesale Corp and Wal-Mart Stores Inc .
A&P's stores also include Food Emporium, Pathmark, Superfresh and Waldbaum's, as well as its namesake stores. It said it employs about 39,000 people. The company once operated more than 15,000 stores.
The investment and the reorganization plan require approval by U.S. Bankruptcy Judge Robert Drain in White Plains, New York.
The case is In re: The Great Atlantic & Pacific Tea Co, U.S. Bankruptcy Court, Southern District of New York, No. 10-24549.
2 comments:
Curious about what you would do with American Airlines bonds?
If I could get my hands on the mortgage bonds, I would buy them. I would stay away from debentures.
Post a Comment