Posted by Michael Morrongiello on July 23, 2002 at 22:24:23:
In Reply to: Par for note posted by Steve on July 22, 2002 at 15:36:22:
PAR is typically not paid for ANY Note purchased for the simple reasoning as follows:
Lets say I purchase a $250,000.00 Note that is written at 10% from you and pay you the PAR pay price of $250,000.00 - in all likelyhood I have had to expend time and money to analyze your deal, perform some cursory underwriting, and due diligence, etc.
Now this Note pays off in full after just a month. What have I really earned? How much interest have I collected?
In reality I probably will have LOST money on such an investment when you factor in the time and money expended prior to purchasing such an investment.
This is one reason WHY Notes are typically sold at a discount - to help compensate for such factors as above.
Warmly,
Michael Morrongiello
www.sunvestinc.com