Recent Question/Assignment

11/11/2015
Case 3: Metromedia
Case: Metromedia [9-286-044]
Why were returns on Junk bonds less volatile than those on investment grade bonds over 1982-1984?
Why weren’t excess credit spreads on lower-grade bonds arbitraged away as the high yeld market developed?
How liquid was secondary market for high-yield securities?
Why does Kluge want to issue debt?
Who are likely buyers of the various instruments?
What is the basis for underwriting debt that even the prospectus suggests is highly speculative?
I expect the report to be no longer than 8 pages plus appendices if necessary. Please use 11pt font or larger, decent line spacing and margins. You can also submit whatever supporting material you can see fit.