Seth Klarman Case Study on Federated Stores!

Seth Klarman case study 2
- Federated stores were going to miss payments and bonds sold off to a huge discount
- Face value of bonds was 2.4 billion
- 2.4 billion dollars of bonds could be bought with 1 billion dollars in the open market(40 cents on the dollar)
- Company had 500 million dollars in cash
- Positive cashflow and were still in the black
- Restructured debt would involve 75 cents in debt and 20 cents in equity given per senior bond held-->95 cents -->50% margin of safety