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It's not mentioned in the article, but the bonds could be convertible, which would allow the bondholders to exchange them for stock in the future. Bondholders a
by spyspy 8y ago
It's not mentioned in the article, but the bonds could be convertible, which would allow the bondholders to exchange them for stock in the future. Bondholders are almost guaranteed to be more secure than shareholders by law (getting their money back isn't guaranteed if WeWork went bankrupt but they'll 100% get paid before shareholders. Finally, WeWork owns real property so they have plenty of collateral.
- dragontamer 8y ago> but the bonds could be convertible Such bonds are called "convertible bonds". The bonds listed in this article are: > WeWork is issuing seven-year, senior unsecured bonds Which is pretty specific. I don't know the meaning of every word, but it sounds as if this is a conventional 7-year junk bond. So I'm not 100% a financial professional. But I'm pretty sure the lingo is super-specific about these details.
- spyspy 8y agoSenior and unsecured don't mean that they aren't also convertible.
- dragontamer 8y agoWell, there are certain keywords that are typically left off (ie: "Callable") because they're so far in the weeds that they don't really make a big difference. But "convertible debt" is a big deal. If Bloomberg (a financial newspaper) didn't use the word "convertible" to describe the debt, its probably not convertible.