Baby Bond Special Situation: Paid to Wait

How a distressed bond turned into an event-driven trade, and whether the final spread is still worth owning

Investing in bonds is supposed to be boring. That’s the deal you sign up for. You lend money, you clip a coupon, and if you’re right, you make 1.2-1.3x over a period of years. Buy cheap enough and maybe you squeeze out 1.5x. A double is a career trade. You tell people about a double.

Multi-baggers don’t really exist in this asset class. The math fights you: your upside is capped at par plus coupons, and anything trading far enough below par has usually earned the discount by dying. I’ve seen it happen a handful of times.

This is one of them. A bond I wrote up three years ago at the lows is now a five-bagger on price, and counting coupons, roughly 6x your money.

The only question remaining: is there juice still left in the trade?

Putting this behind paywall early as it is illiquid despite being exchange traded and every cent matters for this trade.