A Bond Play on the Rogers/Shaw Acquisition.
In March 2022, Rogers issued bonds with an interesting clause referred to as Special Mandatory Redemption.
If the merger is not concluded by December 31st, 2022, the bonds will be redeemed at $101.
Shaw’s equity is roughly $5 below the takeout price, implying the market believes there is a reasonable chance the deal falls apart.
The Rogers SMR bonds are currently trading between $93.25 and $94.75 and yield between 4.7-5.7% depending on the issue.
So an investor can earn an attractive yield if the deal goes through and a quick ‘six points’ if doesn’t.
Disclosure: A fund managed by Algonquin Capital holds a position in one or more securities mentioned in the following post. The holding(s) represent 2% of the total net asset value of the fund.