There's a gambler's case to be made for almost any new debt issue.
It's really just a matter of sorting out where the notes one is considering are in the pecking order and estimating the probability of the issuer going bankrupt to put reasonable bounds on expected return of principle if they fail.
A similar estimate can then be made on the probability of default or restructuring for the notes under consideration.
Given that information and a big enough coupon, a quarter-Kelly or half-Kelly bet may not be unreasonable.
At this point there are too many unknowns to make that case however.
We'll have to see what coupon they decide on and enumerate the things that could knock them out or severely limit their free cash flow.
To your quote from the CEO, it's not a great way to market debt issues tbh. WeWork really isn't any different from any other REIT and one does not lend a REIT money because they are great people.
It's really just a matter of sorting out where the notes one is considering are in the pecking order and estimating the probability of the issuer going bankrupt to put reasonable bounds on expected return of principle if they fail. A similar estimate can then be made on the probability of default or restructuring for the notes under consideration.
Given that information and a big enough coupon, a quarter-Kelly or half-Kelly bet may not be unreasonable.
At this point there are too many unknowns to make that case however. We'll have to see what coupon they decide on and enumerate the things that could knock them out or severely limit their free cash flow.
To your quote from the CEO, it's not a great way to market debt issues tbh. WeWork really isn't any different from any other REIT and one does not lend a REIT money because they are great people.