Investment Q&A

Yes it is a bit complicated, but we think the issue stems from the fact that it is easier and probably cheaper to create a new series with no redemption clause than to re-open the trust indenture on the existing debentures and get bond holder approval (which may or may not happen). Of course CSU could just decide not ever to redeem, but this method makes that decision more concrete and not at the whim of the company. There may some tax/accounting reasons as well which we are not privy to. But CSU has 21.2M shares outstanding, and with 21.2M warrants x $100 par there should be more than enough warrants to go around, based on the outstanding expected amounts of debentures. The warrants will have a price, but we would not expect it to be significant. Still, the total yield to maturity will need to be adjusted downward if an investor needs to pay for more warrants to do a full swap.