The First Junk Bond: A Story of Corporate Boom and Bust

Overview

This is the comprehensive story of Texas International Inc., a small domestic oil and gas company that needed new capital resources for growth. It turned to Drexel Burnham Lambert and Michael Milken who engineered the first junk bond issue for this company at high interest rates. The book records the unusual events that befell the company, through its corporate growth and decline, debt exchange offers, bankruptcy, and corporate rebirth as (fittingly named?) The Phoenix Resources Companies, Inc. Readers will find ...
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Overview

This is the comprehensive story of Texas International Inc., a small domestic oil and gas company that needed new capital resources for growth. It turned to Drexel Burnham Lambert and Michael Milken who engineered the first junk bond issue for this company at high interest rates. The book records the unusual events that befell the company, through its corporate growth and decline, debt exchange offers, bankruptcy, and corporate rebirth as (fittingly named?) The Phoenix Resources Companies, Inc. Readers will find interesting background on the oil and gas industry, as well as discussion of the financial wheeling and dealing that set the precedent for corporate financial innovations in the 1980's. This book offers a valuable innovation of modern corporate finance in the form of a model to predict bankruptcy. Students, scholars, trade market businessmen - all who are interested in the 1990 financial issues including bankruptcy, exchange offers, and corporate reorganization will find Harlan Platt's The First Junk Bond an illuminating case study.
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Editorial Reviews

Booknews
Platt (finance, Northeastern U.) chronicles the growth, decline, and restructuring of oil and gas company Texas International Inc. in the 1980s and the criminal involvement of Drexel Lambert investment house banker, Michael Milken. To draw lessons from this case, the author interviews a fund manager and a stockholder and applies a bankruptcy prediction model in his analysis. Appendices supply industry basics and data. The book was originally published by M.E. Sharpe in 1994. Annotation c. Book News, Inc., Portland, OR (booknews.com)
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Product Details

  • ISBN-13: 9781587981203
  • Publisher: Beard Books, Incorporated
  • Publication date: 2/28/2002
  • Pages: 256
  • Product dimensions: 5.58 (w) x 8.60 (h) x 0.65 (d)

Table of Contents

List of Tables and Figures
Preface
Acknowledgments
Ch. 1 Introduction 3
Pt. I The Growth Years
Ch. 2 The Beginning 9
Ch. 3 The Merger with Phoenix Resources 32
Pt. II The Period of Decline
Ch. 4 Reacting to Industry Conditions 39
Ch. 5 Egypt and the Khalda Concession 45
Pt. III Death and Rebirth
Ch. 6 Three Exchange Offers 71
Ch. 7 Bankruptcy 106
Ch. 8 A Restructured Company 132
Pt. IV Financial Lessons
Ch. 9 Interview with a Fund Manager 147
Ch. 10 Interview with a Stockholder 152
Ch. 11 Analyzing the Company with a Bankruptcy Prediction Model 155
Ch. 12 What Have We Learned? 160
App. A: Oil and Gas Industry Basics 163
App. B: Oil and Gas Accounting 166
App. C: TEI's Four Divisions 170
App. D: Industry Segments 184
App. E: Sources of Finance to Oil and Gas Companies and TEI 186
App. F: Oil and Gas Regulation 197
App. G: Industry Conditions 200
App. H: Egyptian Oil and Gas Production History 213
App. I: The Khalda Concession Financial Model 215
App. J: Original Khalda Concession Terms 219
Bibliography 223
Index 229
About the Author 237
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