June 15, 2010
“As a bond holder all you really care about is that they stay in business,” said Keith Springer, president of Springer Financial Advisors, a Sacramento-based wealth advisory firm, who puts the likelihood of a BP bankruptcy somewhere around 30%. (Springer says he has not been buying BP bonds, but has been dabbling in some other credits of companies tied to the Gulf oil spill.) Still, he says BP bonds are probably a good buy. “Once this is over, they’re going to be a viable company,” he told MarketBeat, of BP.
While really risk-hungry investors might be tempted to buy into shares of BP, more conservative bonds offer different ways investors can benefit, Springer says. The price of the paper itself could bounce back, generating a nice gain, as worries about the company’s survival relent. Meanwhile, as investors wait, they collect a nice fat interest payment of more than 8% over the next year.
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