You caused me to have a better read and a good look into Callable Bonds [which is always a bit of a drag].
Upon that re-read it would seem it's in fact Linc who can't call the bond for two years, not the bond-holders like I [and most of us?] originally thought!
Investopedia explains 'Noncallable'
"Bonds are often called when interest rates drop because lower interest rates mean the company can finance its debt at a lower cost. The call feature subjects investors to reinvestment risk.
The opposite of a noncallable security is a callable security. A callable security can be redeemed early and pays a premium to compensate the investor for the risk that he or she will not earn as much compared to holding the security until maturity.
Some callable bonds are noncallable for a set period after they are first issued. This time period is called a protection period."
So when this is placed in context of today's ann it seems everyone who believes the possibility of dilution is remote because the company will buy the bonds back within two years, has it wrong. Because they can't.
Anyone agree?
LNC Price at posting:
$2.27 Sentiment: None Disclosure: Held
