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BONDS - LEH What next for bondholders?
Lehman declaired bankrupcy. They stated business as usual for now.
What is likely to happen to the bonds Lehman sold? Will they continue to pay the scheduled dividends?
Will people not be paid if they hold them? Will they have to settle for less than par? (100% of their money)
Can you point to history to support your answer?
1 Answer
- Felix_FINA4242Lv 41 decade agoFavorite Answer
The Lehman bonds will not be paying their scheduled coupon payment, and the prices for these bonds dropped therefore drastically. In fact, they dropped so much that a money market fund that invested in Lehman bonds had to tell investors that they lost part of their principal - the fund is "breaking the buck", see http://www.nytimes.com/2008/09/18/business/yourmon...
Source(s): http://www.nytimes.com/2008/09/18/business/yourmon... http://www.investorguide.com/igu-article-596-bonds...
