Word: convertibles
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Dates: during 2000-2009
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...administration began testing the banks, knowing that, based on the criteria they had set, many of the firms would fail. The credit markets are harsh. The troubled banks would find it nearly impossible to raise capital from private equity sources. They would turn to the government. The government would convert its preferred shares to common shares to buttress the bank balance sheets. Suddenly, the taxpayers would own controlling interests in many of the largest financial firms in the world...
...That raises a question for investors. If the government buys the bank's common stock outright, investors know how much their own stake is diluted. But since some of the preferreds may convert and others won't, investors are left with a less clear picture of a bank stock's worth...
...bank could also negotiate with the federal government to get it to convert its preferred shares to common. That would cause uncommon dilution which would almost certainly drag down the price of the bank's stock. (See pictures of the global financial crisis...
...have been put on hold. In the past year, plaintiff and MIT President Emeritus Paul E. Gray said that the developers had altered their plans and that communication between the developers and URC has broken down. In a meeting with URC last November, the developers voiced their desire to convert the remaining condominiums into rentals, but has not met with the plaintiffs since, according to Gray. “Instead of coming out and saying, ‘look we’ve changed our mind,’they’ve ignored us since November...
...pointed out, private equity has no interest in stakes in troubled banks even at a steep discount to their current market values. To help improve banks' capital bases, the Administration will almost certainly have to take the money it has given and is about to give to banks, and convert it into common stock. That will crush current shareholders and it will create the problem of how taxpayers ever get paid back. (See 10 things to do with your money...