I mentioned in prior posts that I believed the swap agreement creating the float in JBK had been terminated due to the Lehman bankruptcy. This has been confirmed in a recently filed document with the SEC, see section 8.01, second paragrpah: http://www.sec.gov
This confirms what I previously said about the bankruptcy resulting in a termination of the swap agreement which gives the holder of JBK the right to receive interest as provided by the underlying fixed rate coupon bond, a junior bond from Goldman Sachs maturing in 2034 with a 6.345% coupon Bought 100 JBK at $16.15 One additional issue is presented by a related filing. For the interest payment made in February 2009, the trustee withheld $100000 to cover its expenses in the bankruptcy proceeding, and said that it may need more. http://www.sec.gov
The filing does not indicate why this expenditure of funds is necessary for this particular issue.
I did check other Lehman ABS filings, which were just made, for Trust Certificates that did not involve an active swap agreement at the time of the bankruptcy, and the Trustee did not withhold any funds from those payments:
JBI (owned & sold): http://www.sec.gov
XKK (OWNED) http://www.sec.gov/
JZE (OWNED)http://www.sec.gov
JZJ (OWNED /www.sec.gov
JZV (owned)http://www.sec.gov
JZH (owned) http://www.sec.gov
XFL (owned)http://www.sec.gov
The penny rate for the upcoming payment in August for JBK suggests nothing is being withhold for Trustee expenses, just based on the penny rate being what I calculated to be owed for a 6.345% coupon bond with a $25 par value.
I do not have any more information on this subject. I can only surmise, guess would be a more appropriate word, that something about the swap agreement in JBK caused the Trustee to incur expenses for JBK that it did not have to incur with the other Trust Certificates that originated from Lehman ABS. Possibly, Lehman had to admit it had no rights as the swap party after the bankruptcy filing, but that is just a guess. I do not know why.
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