I will start this by saying that I don't understand the working of the bond market but here goes:
Using round figures.
Yesterday we repaid an Anglo bond for 1 Billion Euro which was the original redemption value.
It is possible that the bond had changed hands many times since it was originally issued and not always at face value.
So let's say the current owner paid 600 Million for it three years ago.
Could we have bought it last year for 800 Million, thrown it in the bin and saved 200 Million? The holder would make a profit of 200 Million as well?
Can we do this for existing bonds that are in existence?
I am fairly sure there is something flawed in this otherwise I'm in the wrong job
Using round figures.
Yesterday we repaid an Anglo bond for 1 Billion Euro which was the original redemption value.
It is possible that the bond had changed hands many times since it was originally issued and not always at face value.
So let's say the current owner paid 600 Million for it three years ago.
Could we have bought it last year for 800 Million, thrown it in the bin and saved 200 Million? The holder would make a profit of 200 Million as well?
Can we do this for existing bonds that are in existence?
I am fairly sure there is something flawed in this otherwise I'm in the wrong job