NYT Redeeming 2010 Notes

NYT didn't even wait for the wire transfer from W.P. Carey to cool off before announcing moments ago that it would redeem its $250 million of 4.5% notes due 2010. In what can only be described as a building-for-debt exchange, Carlos Slim's U.S. newspaper has converted debt maturing 2010 with the debt backing the lease of its headquarters which matures anywhere between 2019 and 2024 but at double the interest rate. From the PR:

The New York Times Company announced today that it has called for redemption of all $250 million outstanding aggregate principal amount of its 4.5% notes due 2010. The notes will be redeemed, in accordance with their terms, at a redemption price equal to the present value of the principal and unpaid interest, plus accrued interest to the redemption date. The Company will use the proceeds from its recently completed sale-leaseback for a portion of the space that the Company owns in its New York headquarters to fund the redemption payment.

Based on TRACE at least one person saw the writing on the wall, and purchased over a million of the 4.5% bonds at noon today for a price of 90. As these notes have a make whole provision, they will likely end up being redeemed at a price well north of par, implying today's transaction made the purchaser a good 10% return in one day. We salute you, make-whole-bond-purchaser-with-excess-cash-from-sale-leaseback-transaction real man of trading genius. Sphere: Related Content

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