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Written by 8:25 pm Blog, Securities Fraud Articles

Update on the Potential Recovery of MF Global Bonds including 6.25% Senior Unsecured Notes

The White Law Group recently blogged about the potential for recovery of MF Global 6.25% Senior Unsecured Notes, due 2016, by investors.  The firm is currently evaluating the potential to file claims against the brokers and brokerage firms that sold the bonds through FINRA arbitration. The original post can be found here: https://www.whitesecuritieslaw.com/2011/11/02/recovery-of-mf-global-senior-unsecured-note-investment-losses/

Those 6.25% Senior Unsecured Notes continue to be a hot topic of conversation in the trading world. Wall Street blogger Shira Ovide noted that a batch of the 6.25% Senior Unsecured Notes were traded on Monday afternoon October 31st at “48 cents on the dollar” and that it seems to indicate that “investors expect the bankrupt company’s bond holders will only get about half their money back.” She also notes that a week earlier the same bonds “were trading at 88.5 cents on the dollar.”

A November 3rd article from SFGate.com also indicates that there is wild uncertainty surrounding MF Global bonds. The article states that “Investors are circling MF Global Holdings Ltd.’s bonds that plunged as low as 35 cents on the dollar last week, wagering most of the damage Jon Corzine inflicted on the failed broker will fall on stockholders.”

The price has had tremendous variation in these uncertain times as money managers gamble on the value of the bonds when the dust from the bankruptcy settles. The SFGate article quotes Scott Colyer CEO of Advisors Asset Management Inc. who believes the price of the bonds will eventually hinge on whether suspected missing MF Global customer funds are found. He said, “The bonds may reach 90 cents to 100 cents on the dollar if the customer money is located, while it may dip to the “low 60s” if it’s missing.” Bonnie Baha head of DoubleLine Capital LP, also quoted by SFGate, thinks the future of these bonds may still be too murky at the moment to gamble on their recovery or predict a price, she said, “Maybe if you can do your homework and get comfortable with the accounting in the assets, it’s a good buy, but I’m just fearful of what we don’t know yet.”

So where does this uncertainty leave a non-institutional investor who bought a MF Global bond and is now concerned with where they will land? At this point it is unclear, but as Shira Ovide indicated, a loss of 50% or more is certainly possible.

If you invested in an MF Global bond like the 6.25% Senior Unsecured Notes and would like to speak to a securities attorney about the potential you may have to recover your MF Global investment losses please call our Chicago office at 312/238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at https://whitesecuritieslaw.com.

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