Re: 100% face value Note Buyers - Posted by Bill
Posted by Bill on February 25, 1999 at 20:36:59:
A very tired, overused phrase in the paper business… we pay 100%!! Misleading at best.
What they really mean is, they will buy your note over time, and the total of all the payments will equal the face value today.
Remember though… they keep the payments on the note in the meantime.
An example is… face is $100,000.
They pay 65,000 today, plus $35,000 in 6 years. Did you get your “100% face value”? What if you don’t receive the $35,000 for 20 years? Is there a difference? Note buyers simply pray upon the ignorance of note holders who don’t know what discount means… or the time value of money…
Nothing magic about this offer…