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He said that he was not suggesting a default, but instead that the government could seek to repurchase debt for less than the face value of the securities.
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But the number of bankruptcy filings was limited as the capital markets quickly recovered, allowing firms to shore up their companies by repurchasing debt or issuing new equity.
Repurchasing debt is a fairly common tactic in the corporate world, but it only works if the debt is trading at a discount.
The investment banking business also gained 365 million francs that Credit Suisse booked as profit on its own debt, because the bank could theoretically repurchase the debt in the market at a lower price than was reflected on its books.
Tyco International Ltd., which has paid off more than $8 billion in debt since 2002, said yesterday that it would make contributions to its pension plan of at least $500 million and might have costs to repurchase convertible debt.
NEW YORK TIMES Greece May Seek to Buy Back Debt at Market Rates | Almost nine months after forcing private sector investors to stomach a 75 percent loss on their Greek bonds, the Greek government is weighing a plan to repurchase its debt at today's market price of 25 to 27 cents.
Almost nine months after forcing private sector investors to stomach a 75 percent loss on their Greek bonds, the Greek government — with the support of Germany, its largest creditor — is weighing a plan to repurchase some debt at today's market price of 25 to 27 cents, according to bankers and lawyers involved in the talks.
For example, XO Communications of Reston, Va., is moving ahead with plans to repurchase its debt in the secondary market, and Level 3 Communications of Broomfield, Colo., has amended its credit agreement to allow it to exchange its shares for some outstanding debt.
It is offering $1.45 billion in common stock and $500 million in mandatory convertible preferred stock, $675 million in senior notes to repurchase senior debt, and another $425 million in senior notes to repurchase the governments preferred stock.
Citigroup essentially orchestrated a large sale of European government debt and then repurchased that debt shortly afterward at depressed prices.
The money raised will be used to pay down or repurchases its debt and for general corporate purposes.
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