Bloomberg News reports:
MF Global Holdings Ltd. (MF) plans to sell bonds with an interest rate that will rise if Chairman and Chief Executive Officer Jon Corzine receives a federal appointment from the U.S. president.
The futures broker is selling $300 million of five-year senior unsecured notes to repay a bank line and for general corporate purposes, according to a person familiar with the offering, who declined to be identified because terms aren't set. The coupon will increase 1 percentage point if Corzine is appointed and confirmed by the U.S. Senate before July 2013, MF Global said today in a regulatory filing.
Apparently the issuer thinks bond-buyers will think Mr. Corzine is worth more to the company as an executive than as a government connection. Bet that if Mr. Corzine joins the Obama administration, it's not only MF Global's bond coupon that will rise, but that on Treasury bonds, given Mr. Corzine's propensity for government spending.
