DLPH 5 10/01/25

Delphi Technologies PLC

Credit, Industrial/Transportation, Event Driven/Special Sit


Presented:06/22/2020
Price:N/A
Cap:N/A
Current Price:$17.02
Cap:N/A

Presented

Date06/22/2020
PriceN/A
Market CapN/A
Ent ValueN/A
P/E RatioN/A
Book ValueN/A
Div Yield0%
Shares O/SN/A
Ave Daily VolN/A
Short IntN/A

Current

Price$17.02
Market CapN/A

Publicly traded companies mentioned herein: BorgWarner Inc (BWA), Delphi Technologies PLC (DLPH)

Highlights

The presenter has invested a significant amount of capital in a pair of positions involving the securities of companies in the midst of all-stock M&A transactions. This part of the larger “trade” is on the BorgWarner (BWA) & Delphi (DLPH) deal and was characterized as “a free put on things getting bad, but a guaranteed return if the deal closes.” The other position is outlined in Long WLTW. With BWA/DLPH, he is currently long Delphi bonds (the 5% paper) trading at ~106 and a 4.5% YTM - and short the merger spread (dollar neutral). The goal is to lock in a nearly certain 3-4% return if the deal closes on time (within ~4 months), without taking outsized risk. This position leaves open the possibility of a larger gain if things fall apart (heavily indebted DLPH could see its stock decline by 60-70% if the deal fails, but the bond would be down by half of that, in his opinion).

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Idea Discussion

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