It seems that forcing bond holders to trade debt for common is becoming a standard operating procedure. But as a common stock shareholder, that doesn't make me happy. On the other hand, why not figure out a way for pension holders to have a chance to exchange some of pension guarantees for some hybrid preferreds? That might make the CFO happy.
It's non voting so I don't have to hate it. Issue at $25 with a guaranteed coupon. I think 5 or 6% would make it pretty attractive. Plus it's liquid in the secondary market, if the pension holder wants cash now, they can sell it now. That should make them happy. Plus it would probably attract some new money that doesn't know where to go.
You can figure out the exact package, but if you bundle the deal with new career training or subsidizing the cost of starting a new business with advice and discounted click costs, it should be possible to make me happy, make the CFO happy and make the pension holder happy.
Win-win- win is usually sustainable. Plus it's cheaper than the 8+% you have to with unsecured notes.
Besides, the PBGC is going to be pretty stressed. That should incent pension holders to take a fair deal. Eric Lipton at the NY Times says: Bankruptcies Swell Deficit at Pension Agency to $33.5 Billion