Forum Archive Index - April 2003

["Michael McGregor" <mikemcgregor@nzoomail.com>]

>Hi hugh,
>
>>
>> 
>> All there is is an unsubstantiated allegation by someone 
>> who can type QWERTY that they  are "junk bonds" 
>>which I'm pretty sure is rubbish. Feltex are very
>> substantial carpetmakers and the other NZ substantial 
>> carpetmaker Cavalier is hardly in the junk bond category.
>>
>>
>
>I've never understood the term 'junk bonds' to mean that the investment is
no good.  All 
>it means is that the level of security is below what you would expect from
a bank deposit.  
>A 'junk bond' can still be a good investment
>
>Our mate Warren in the USA is right into buying junk bonds on the secondary
market at 
>the moment.  A junk bond might be no good, but alternatively it might be that
the issuer 
>of the bonds does not have a suitable credit rating to issue anything else.
  It is possible 
>to have a substantial respectable company that issues junk bonds.  A  10.25%
interest 
>rate sounds like a junk bond interest rate to me.   But exactly what the risk
is with any 
>particular bond issue, like this one,  is something that you will need 
>investigate.

>
>IIRC Feltex ended up in the hands of an Australian conglomerate ( BTR Nylex
?).   But 
>once they went off shore I ceased to follow them so that info could be out
of date.
>
>SNOOPY
>
>
>--
>Message sent by Snoopy 
>on Pegasus Mail version 4.02
>----------------------------------
>"You can tell me I'm wrong twice, 
>but that still only makes me wrong once."
>
>
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>
>Snoopy,
              I would want to know what Feltex are intending to do with the
raised funds before I 
would buy bonds with an interest rate that high. If they can afford pay out
10.25%, they must be 
hoping to make big returns. Big returns usually mean big risks.


Cheers

Mike M 


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