Re:Why is the stock market rallying when the economy is so bad?
by bobbyi_settv on Sunday May 10, 2020 @05:13PM
(#23136256)
Just because you believe the government won't let the airlines go away doesn't ensure that the bonds are safe. Sometimes keeping a company in business involves a restructuring such that those bonds won't pay out as you're expecting.
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Re:Why is the stock market rallying when the economy is so bad?
by quietbritishjim on Sunday May 10, 2020 @05:52PM
(#23136605)
Genuine question: if a company didn't pay out on its bond, that's a default; how can it default without going bankrupt?
Re:Why is the stock market rallying when the economy is so bad?
by peteretep on Sunday May 10, 2020 @07:33PM
(#23137303)
I believe what you’re missing here is a “Chapter 11 Bankruptcy”, as opposed to a “Chapter 7 Bankruptcy”.
Chapter 11 means the business keeps running, but the owners lose their money, Chapter 7 is what most of the world considers to be a bankruptcy / going bust / liquidation. Uncle Sam probably doesn’t care if Delta does a Chapter 11, as long as the planes keep flying.
Re:Why is the stock market rallying when the economy is so bad?
by kube-system on Sunday May 10, 2020 @09:27PM
(#23138007)
I guarantee that Uncle Sam doesn't care if Delta files chapter 11.
Re:Why is the stock market rallying when the economy is so bad?
by kart23 on Monday May 11, 2020 @04:13AM
(#23139929)
holy shit. And there was a guy here who bought delta bonds, saying he would make an easy 7% by the end of the year.
Re:Why is the stock market rallying when the economy is so bad?
by chii on Monday May 11, 2020 @02:43AM
(#23139470)
sometimes bond holders are given the option to convert the debt into equity (at probably pennies to the dollar, which is a steep discount and therefore, a good deal) - that's what restructuring means.