lets say that the vulture find bid 10-15 cents on the dollar. to get the 85 cents on the dollar valuation JPM lends the vulture the difference - 70 cents - so the vulture puts up about 20% equity (sizeable)
lets say the note carries a provision to assure the vulture an IRR of x no matter the recovery outcome
so JPM the lender or the lender on behalf of other offshore lenders clean up JPM India
http://capitalmind.in/2015/12/good-news-for-jp-morgan-debt-mf-holders-they-have-sold-the-amtek-auto-debt-at-a-haircut/?utm_source=tpiw_posts&utm_medium=OnBlog&utm_campaign=TPIWPosts
lets say the note carries a provision to assure the vulture an IRR of x no matter the recovery outcome
so JPM the lender or the lender on behalf of other offshore lenders clean up JPM India
http://capitalmind.in/2015/12/good-news-for-jp-morgan-debt-mf-holders-they-have-sold-the-amtek-auto-debt-at-a-haircut/?utm_source=tpiw_posts&utm_medium=OnBlog&utm_campaign=TPIWPosts
The fact that someone was willing to pay 85% for the Amtek bonds probably means there is a lot more than we know right now. A vulture fund won’t pay 85% unless it’s dead sure of recovery within a year. (unless JP Morgan is somehow paying this off its own pocket) We’ve argued that the company Amtek Auto is unlikely to give more collateral to satisfy the vulture buyer’s risk appetite. So what’s happened to bring in this level of confidence? We’ll keep our eyes open.
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