Dumb Credit Question Help
Dumb question alert below -
If a loan / security is trading below par on the secondary market and then get's refinanced / replaced, do lenders to that loan receive the par value at time of refinancing OR do they receive the market price?
i.e., if loan is trading at 90 do lenders get 90 or 100
pretty sure you would get 100 back given how yield is calc'd but pls tell me if I'm wrong
you don't get the MV. you'd usually get the par value, but depends on the terms. can receive the OID as a fee down the line. usually consent to cashless roll in to the new paper
If you elect to be refinanced, when wouldn’t you be paid out at par?
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