When I mentioned bonds, I had in mind to look into them to...

When I mentioned bonds, I had in mind to look into them to understand why firms issue bonds, and why CCP has not done so. Bonds may be preferred to capital raising, because they do not require changing the control of the company. Their advantages over bank loans is that they can be structured to have different maturities, and I am fairly sure they are cheaper than borrowing from banks.

A second thought was the the danger that easily-acquired funding (borrowed or raised) can occasion in many businesses, and in particular PDL-style businesses like CCP, CLH and PNC. Easily-acquired funding is like sex, it befuddles the mind. Also, if money is raised via a CR, management can highlight how profits have grown, and remain substantially silent on the diluted EPS.

PDL-style businesses have leeway to fabricate profits in the short term by ascribing more value to PDL assets soon after acquiring them. This leads to the befuddled notion that success lies in acquiring more PDLs, so more are bought than they can optimally handle over the five or so years of a PDL's life, and at a higher price than makes sense. Disaster then follows. I have written often on this theme. CCP had its disaster a dozen years ago, and has since been protected by that painful memory.