What's your reaction when you hear 14% Yield?
A group of banks led by Goldman Sachs are trying to unload $4 billion of Citrix debt that has been stuck on their books for months
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For details you can look to this article
https://ca.finance.yahoo.com/news/goldman-dangles-14-yield-roughly-143305600.html
It's not as much the 14% yield as it is the fact they had to guarantee it for 2.5 years for anyone to freaking buy it. Hopefully nobody's pension fund invested in these cr-p junk bonds. Especially ones from companies whose former ELT's had to fudge the ARR numbers to make their transition/growth strategies look like they were trending in the right direction.
Citrix investors were duped, customers were fooled, and greedy banks got what they deserved -- junk bonds from the PE robbers. This fiasco has a history of cheats and liars.
And yet, the prior CEO and CFO have not been charged for their years of "creative accounting" practices that led Citrix to financial collapse. The Citrix debt is 100% junk.
Goldman generally knows what they are going. Even with 14% there must be something they don’t like about it. Whatever, understanding the the seedy financial underworld isn’t why I got into tech. What matters is my day to day and future prospects - both of them aren’t good ATM.
A few facts.
There are 30+ parties in the debt syndicate (that being the vehicle that collectively drove the financing of the sale.
Debt swaps / debt sales / refinancing is incredibly common and junk debt is currently a strategic focus of some investors.
There has already been $9bn of debt sold since the sale completed.
The timing of the deal sucked for big banks. They have already lost almost $1bn (assuming this latest debt sale goes ahead).
Despite the heartfelt and wonderful "GEM" that R0bert Sm1th and J3sse C0hn (along with all the other suits and the hideous "rank and file" woman) attended in FLL just before the deal closed, this is not R0bert's money. He won't give a sh1t (just like TK doesn't) until the final day of reckoning.
Again, understand the thesis. Good luck.
@1iyd+1lXAflsf Isn't it a bit late for April Fool's Day?
@ 1iyd+1lXAflsf I have some office buildings in Florida to sell you. 😂😂😂
Wow, what an amazing investment! I can't find anything else with such a high return. The banks are only giving .01% interest. The government is around 6%. With mortgages at 7% and inflation at 6%, you need a 14% junk bond just to barely cover the cost of living increases.
The company has always paid it's debts and has customers locked in. With all the savings from layoffs and office closings, the % could be even higher. Imagine all the profits without any expenses when the company goes to 20 billion revenue in a few years. The bonds will be even higher returns then. Get in now before it shoots to the moon.
(this is not investment advice)
I think that they know TK, that the debt is toxic to their bottom line because TK is ki-ling the company and they are panicking.
Toxic asset