A Great Bond Deal You Will NEVER Get – Guess the Issuer!

February 9, 2010 12:33 pm

So this crosses my desk the other day. It is going to benefit someone…. But who? It appears that the one who will benefit will be the seller as there is a step rate and it is callable anytime after issue.

More importantly, notice that the teaser is for the 7% that no one will ever receive as the probability is high that it will be called well before it pays that rate.

Goldman Sachs Note Step-ups 8.5nc6mos 8/24/18
Cusip 38143UGG0     Rating: A1/A

  • 4.00% for 4.5yrs (2/24/10 – 8/24/14)
  • 5.00% for 2.0yrs (8/24/14 – 8/24/16) IRR @ Par = 4.82%
  • 7.00% for 2.0yrs (8/24/16 – 8/24/18)

Settles 2/24/10 Qtly Pay    *       Call 8/24/10 Qtly Call        *No Deathput*


Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.

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