poison-put bond

(redirected from Poison Puts)

Poison-Put Bond

A bond that allows bondholders to redeem before maturity at a high price should certain, named events take place. These events commonly include restructuring, a leveraged buyout, an attempted hostile takeover, or paying dividends in excess of a certain amount or percentage. Poison-put bonds can act as an anti-takeover measure; they help management discourage takeovers by raising their expense. On the other hand, when the company is going through a difficult time, poison-put bonds can limit management's restructuring options for the same reason.

poison-put bond

A bond that allows an investor to cash in a security before maturity if the issuer becomes the target of a takeover hostile to its management. Poison-put bonds make it expensive for the bidder to buy the target firm because the bidder will have to raise cash to pay off the owners of the bonds. The bonds can benefit the bondholders because they permit the holders to cash in the securities if the takeover spawns a new, more leveraged high-risk corporate entity. See also poison pill.
Mentioned in ?
References in periodicals archive ?
Mr Ruddock said illegally placing poison puts wildlife, pets and potentially people at risk.
It is too early to know the extent to which poison puts will be used and how effective they will be.
Since HYLD largely focuses on seasoned credits and is able to include floating rate loans as a component in the portfolio, its stated duration and maturity tends to be shorter than that of the market indexes, while its actual duration is generally even shorter due to early re-financings and take-outs via calls, poison puts, and tenders.
Take-outs occur when a company decides to take out/refinance the bonds according to a scheduled price; poison puts reference the change of control from merger or buyout activity; tenders are company offers to buy a security at a set price.
E]ach [of the company's steps to nullify the particularly shareholder-unfriendly aspects of it poison puts and poison pill] was taken only under the harsh glare of a relatively high profile proxy fight.
As far as I am aware, nobody held a gun to the directors' heads and forced them to agree to these poison puts.
the poison pill, the poison puts, and the failure to heed the views of your co-founder, Howard E.
However, at the risk of being facetious, I wouldn't be opposed to making expenditures to discover an antidote for Amylin's poison pill and poison puts.