is pxupa a buy?, page-40

Hi ASF,
Lots of possibilities.

1.step up and either pay or not pay distributions[see elders and eldpa]
2. remarket[very unlikely]
3. pay out at par, [very unlikely]
4. convert to shares[would not be happy with my management if I was an ords holder]
5.buyback at a discount to par, either on market or off.
Off market maybe $60?

As long as they dont go completely broke, major downer would be a long term suspension of dividends.

Question is at this stage, are the ords a better bet on a risk/reward basis?
Starting to lean that way.
Reasoning goes like this:
If they go well enough to be able to keep being nice to the hybrids, then the ords have got to be worth multiples of their present value.
If they manage to buy back the hybrids at say, 60c in the dollar, instant effective improvement in their debt position of 100 million[based on 250 million face value of hybrids].
Hybrids maybe have a max of 120% in them, ords would only have to get into the 30's to match that.
Hybrids further up the food chain than ords, but if this goes broke, doubt the sharks would leave any crumbs for the hybrids anyway.
Hard to see this one surviving GFC2, if it happens.
So, very high risk, but rewards maybe there to justify the risk.
Still pinching myself that I'm getting a distribution June 30th


hold hybrids only

cheers