It's a funny old world we invest in. Seems I didn't actually...

It's a funny old world we invest in. Seems I didn't actually overlook the fact we were borrowing from bondholders, those selfish rogues of the credit universe. RJT borrowed from a reputable bank who then onsold our loan into a securitised CMBS issue (bonds) so that now we are at bondholders mercy of whom we had never met or ever dealt with.

Another company we have never met WaMu represents these bondholder creditors we have never met, some of whom cannot be bothered dealing with a workout for us and think it easier just to firesale everything and move on. Banks for all their bad habbits generally act in a more reasonable way when it comes to work-outs, partly because of the relationship and responsibility they feel for having instigated the loan in the first place but mostly to preserve the value of assets in the market across the rest of their loan book and avoid more write-downs.

Anyway, we are headed for receivership and forced asset sale. Hopefully the receiver can get some reasonable prices and have enough left over for a few cents return (I am owed 2c). Will take a little while but remember that virtually all the Net Asset value over debt was held in TK 1 and 2 because TK3 was almost negative equity (but non-recourse to the others!). Therefore TK1 and 2, which held over 40c NTA, may have a few cents cash left over after further discounted asset sales. Now is a better time to sell than 3 months ago but another year might be better still.

We wait for the windup and see what might be left. My sympathies to those in at higher levels, for me it was a small punt with patient capital at 2c. They were not in that bad a place really having paid off debt for over a year now including closing out profitable currency hedging. But if creditors won't roll-over and you can't (won't?) sell assets then they own you.

goodluck