"MVW Proposes Private Offering of $200M of Senior Notes"

[SueDonJ]

Press Release from SeekingAlpha.com - Marriott Vacations Worldwide proposes ...

What does this mean?

 

[VacationForever]

Press Release from SeekingAlpha.com - Marriott Vacations Worldwide proposes ...

What does this mean?

Layman term means that VAC is wanting to borrow money. These are open to private institutions and have payback priority over regular stocks in the case the company goes belly up and needs to liquidate.

 

[Ralph Sir Edward]

Sue, this a part of a complex scheme to keep the stock price up. Note, this is not offered in the US, and only to 144 investors. (A 144 investor has to be at least a multimillionaire.) The old version of this scheme used to be called a "pool". IANAL, but my opinion as an old investor, is that this is dancing at the edge of legality. ("Pools' were made illegal in the Us with Securities Act of 1934).

 

[StevenTing]

Sue, this a part of a complex scheme to keep the stock price up. Note, this is not offered in the US, and only to 144 investors. (A 144 investor has to be at least a multimillionaire.) The old version of this scheme used to be called a "pool". IANAL, but my opinion as an old investor, is that this is dancing at the edge of legality. ("Pools' were made illegal in the Us with Securities Act of 1934).

I think you know what you're talking about but the way you have it phrased it implies 144 individual investors rather than qualified investors.

When it comes to debt offerings, many of these are purchased by insurance companies and pensions for the cash flow. Very rarely will you actually see individual investors as part of this type of transaction.

 

[VacationForever]

I also just skimmed through rule 144, and there is no mention of 144 individual or private investors. Here is the link: https://www.sec.gov/fast-answers/answersrule144htm.html

 

[tynian16]

This will be bought by large institutions, not individual investors. I work for an insurance company and follow this sector.

 

[StevenTing]

You're better off reading this link. http://www.investopedia.com/terms/r/rule144a.asp

Rule 144 is meant more for restricted stock/securites. Rule 144a allows holders of restricted stock to trade amongst themselves and not have the 2 year holding requirement.

 

[Marathoner]

What does this mean?

It simply means that MVW is going to issue $200M of bonds in order to raise cash. The type of bond is a convertible bond - which means that the owner of the bond can convert it to stock if they want at some point during the life of the bond. The maturity of the bond is 5 years which means that they will return the money you used to buy the bond in 2022.

The notice also indicates that MVW plans to use the $200M that they raised for stock buy-back. Companies do this in order to keep their share price high and because they believe in the health of their company.

 

[SueDonJ]

Thanks to all for the quick and easy education.

 

[bogey21]

The following would make more sense. Borrow money cheap; buy Ownerships back at 20 cents on the dollar; and resell them for top dollar.

George