Dutchflyboi From Netherlands, joined Apr 2008, 340 posts, RR: 0 Posted (7 years 3 weeks 4 days 3 hours ago) and read 5200 times:
HOUSTON, July 11 /PRNewswire-FirstCall/ -- Continental Airlines, Inc. (NYSE: CAL - News) today announced that it has recorded a number of special items during the second quarter of 2008. The special gains (losses) are as follows (in millions):
Operating special charge (pretax) $(58)
Non-operating items (pretax):
Gain on sale of COPA stock 78
Write down of student loan-related auction rate securities (29)
Total non-operating gains 49
Special tax credit 28
Tax effect of special items 3
AirStairs From United States of America, joined Jul 2008, 497 posts, RR: 0
Reply 2, posted (7 years 3 weeks 4 days 1 hour ago) and read 4945 times:
Quoting Toxtethogrady (Reply 1): Why are they still in those student loan derivatives? They're losing multimillions on a stupid bet.
The auction rate securities market went illiquid around February. I am sure they want nothing more than to unload these; but, the fail rate on this auctions has become obscenely high. There is essentially no one to sell them to. The upside is that if an auction fails, the issuer must pay a penalty rate which after several failures can get into the 20-25% range; clearly though this is not offsetting the writedowns for CO.
DeltaAir From United States of America, joined May 1999, 1094 posts, RR: 0
Reply 3, posted (7 years 3 weeks 4 days ago) and read 4817 times:
The write down of the auction rate securities (ARPS) is more a technicality then anything. As we speak, issuers are redeeming some of these securities at par...so likely CO will receive their original investment at some time down the road.
The market for these securities is for the most part non-existent.
Lightsaber From United States of America, joined Jan 2005, 14287 posts, RR: 100
Reply 5, posted (7 years 3 weeks 3 days 4 hours ago) and read 2559 times:
Quoting AirStairs (Reply 2): The auction rate securities market went illiquid around February. I am sure they want nothing more than to unload these; but, the fail rate on this auctions has become obscenely high. There is essentially no one to sell them to.
Its not just airlines being hurt by this. The credit crunch is getting scary.
How this impacts airlines is that its reducing the amount of funds available for travel.
Quoting DeltaAir (Reply 3): As we speak, issuers are redeeming some of these securities at par.
Not many. Most issuers that sold them are having liquidity issues too. We're in "wave 5" of the credit crunch.
I too am curious as to their final results. I'm more interested in the predictions that oil will break $150/bbl next week. I'm not thinking oil will go much higher as when our economy starts to really slow, it will slow China and India too. Oh, I expect them to take an ever greater share later...
I wish the other airlines would report as well as CO.