Publications
Publications
  • January 2017
  • Case
  • HBS Case Collection

Nashua River Capital Management

By: Samuel Hanson and Aldo Sesia
  • Format:Print
  • | Language:English
  • | Pages:10
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Abstract

Investment manager Eliza Baena confronts an apparent convertible bond arbitrage opportunity when she notices a narrowing spread between two Boston Properties (BXP) bonds, one a convertible bond and the other a straight bond, in the wake of the 2008 Lehman bankruptcy. Baena must decide if there is an opportunity, how to structure a trade to exploit it, and how much of her fund's capital to allocate. Case exposition includes descriptions of basic financing arrangements that support arbitrage strategies, such as rehypothecation and margin lending.

Keywords

Asset Management; Bonds; Investment

Citation

Hanson, Samuel, and Aldo Sesia. "Nashua River Capital Management." Harvard Business School Case 217-045, January 2017.

About The Author

Samuel G. Hanson

Finance
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