Distressed Debt Investing- Smurfit Stone

 

 

We have changed our research opinion on the distressed debt securities of Smurfit Stone to Neutral from Buy. The reorganization of Smurfit Stone has been approved and the company is exiting out of chapter 11 bankruptcy. Distressed debt investors of Smurfit Stone unsecured debt will recieve common stock in exchange for their bonds. This action was taken not because we are nervous of the global market turmoil or from changes in the long term prospects for Smurfit Stone. Simply, the price of these distressed debt securities have hit our price target. Our model portofolio has sold it's position at Par (100). Our cash on cash return is 22% which equates to a 132% annualized return. We will revisit this trade if the unsecured debt pulls back to 88-89. You can contact Performance Plus Advisors, Inc. (727-441-1305 ext 203) to learn more about our research reports. Performance Plus Advisors, Inc. specializes in research and analysis of companies in chapter 11 bankruptcy.

  Smurfit Stone Container Corp.

 

sscc.gs (8% coupon)    price 2/28 at 82    price 4/29 at 102.5

 

sscc.gd (8 3/8 coupon)   price 2/28 at 82     price 4/29 at 101

 

sscc.gg (8 1/4 coupon)    price 2/28 at 82    price 4/29 at 102

 

Stephen P. Vlahos

 

 

 

Comments

[Rose Anderson]

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[Danitza]

That is a good question, and help me out here cause if I am reaidng this properly you seem to be able to make the minimum payments but it is tight correct.?Well I see that you have many options . first thing you should be doing is preparing a household budget , very detailed . Determine what can be cut and what has to stay, many items this exercise under covers some waste and gives you the ability tackle more of your debt issue .I can tell you personally it can be done, I used to make 50K and since then have lost my income by 18K. THe funny kicker is I am making more of a debt payment today then I ever could accomplish at the higher salary.Buckle down and run everything through a fine tooth comb re-evaluate daily.Good Luck need help just ask

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