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Question is, why do lenders lend money to them? Maybe they can get the principles back somehow?
by markus_zhang 2y ago
Question is, why do lenders lend money to them? Maybe they can get the principles back somehow?
- sct202 2y agoThey got 13 years of payments which might have been enough to make it worth it for the lenders depending on the premium they were getting on loaning the money. Sears and Joann's also took about 13 years from buyout to bankruptcy. Party City only took 6 years.
- toast0 2y agoThe interest rates are high, and the lenders likely will sell off the loans in a few years. If the company sticks around for a few years and looks ok, they might even be able to sell the loan for more than they lent out. Especially if the corporate numbers look good because of short-term changes, they may be able to get out. When the company goes bankrupt, the lenders have first priority for remaining assets, sometimes lenders will takeover a business and run it away from the shore and earn a profit that way, too.
- markus_zhang 2y agoThanks, looks like interesting cases to study.
- chgs 2y agoStick the junk bonds in. With solid bonds and hide that they exist. Sell to a greater fool.