For those of you that have never had a corporate class from me, you don't know how often we discuss the Nexius of contracts. Well here is a great example!
breakingviews | Sample Story:
" BAA is caught between a rock and a hard place. Its bondholders are demanding better terms - a so called change-of-control clause - on bonds that have yet to settle. Bond investors fear Spain's Ferrovial's highly leveraged approach will cause their investment-grade debt to be downgraded....
But BAA's first responsibility is to its shareholders. It shouldn't change the terms of the bonds because that could act as a poison pill - a deterrent to a takeover bid. And it is up to BAA's shareholders and not its management to decide if an offer - that is, if one is tabled - is attractive.
Besides, a deal is a deal. Bond investors have committed. Unfortunately, they did not negotiate hard enough for a change-of-control clause ahead of time and they may regret it now, but that's their responsibility. "