So now Carlos Slim has a deal to put money into the New York Times (or maybe he doesn't--this thing looks awfully complicated). Not quite preferred, but a note with warrants with is close enough for government work. The note is a zero with a rate of 14 percent; Brad DeLong is gobsmacked and forecasts an early (or at any rate, a medium-term) bankruptcy.
He's right to be impressed but recall (a) "bankruptcy" need not mean "going out of business;" it may be a "sale to the creditors" where the going concern chugs along at a lower speed (kinda like the world economy, huh?); and (b) Slim must figure he is getting something out of the deal--if nothing more than the option to be the owner of the brand.
$250 now for $400 later, bleah. But if you pencil it out at three years and seven months, that works out just about right. ($400/1.14^(3+7/12)=$250.
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