dargie,I think what you have said is a possibility.On the flip...

dargie,

I think what you have said is a possibility.

On the flip side though is the fact that the amount outstanding on the BNBG notes is (from memory) around 4% of the total BNB debt. At the risk of using a highly technical investment banking phrase.. that is chicken poo in the bigger scheme of things. It is subordinated to the bank debt and BNB can accrue the interest for some time without it needing to be addressed. Probably enough time for a workout to progress.

I also suspect, but haven't been able to ascertain for sure, that they will require note holder approval to convert to equity. No approval will be forthcoming unless the terms are in note holder favour and they risk a legal challenge in the mix if they get it wrong.

For 4% of debt, BNB will not be able to play the "convert the notes to equity or else we'll go into administration" card either. The bankers wouldn't let it happen.

At the most basic level, you can buy $100 worth of debt for $4 which is a good safety margin if you believe the company will survive. It's probably an all-or-nothing play to be honest. If they go under, you may get your money back post-administration. If the work-out works-out, they'll be worth a whole lot more either as debt or equity in the future.