Hello:
I have noticed that some of corporate bond with very short maturity (1-2 weeks) trade at large discount, even though, the company has announced (declared) and is going to pay the principle on time. Is this undiscovered opportunity by market participant, or is there still risk of default, or some other risk?
Example would be:
CIT CUSIP 125581AM0. This bond mature on 11/03/09, and the maturity and payment has been announced by the company., however this bond still trading at 69.50. I know cit is on the merge of bankruptcy but they are saying they are going to pay this off. When I say they are saying, that is their investor relation department.
I have seen this before. So is an opportunity? or is there is a risk that I am not aware of ?
Thanks
I have noticed that some of corporate bond with very short maturity (1-2 weeks) trade at large discount, even though, the company has announced (declared) and is going to pay the principle on time. Is this undiscovered opportunity by market participant, or is there still risk of default, or some other risk?
Example would be:
CIT CUSIP 125581AM0. This bond mature on 11/03/09, and the maturity and payment has been announced by the company., however this bond still trading at 69.50. I know cit is on the merge of bankruptcy but they are saying they are going to pay this off. When I say they are saying, that is their investor relation department.
I have seen this before. So is an opportunity? or is there is a risk that I am not aware of ?
Thanks
