The First Junk Bond: A Story of Corporate Boom and Bust : A Story of Corporate Boom and Bust

"The First Junk Bond is a richly detailed case study. Platt integrates corporate history, industry fundamentals, financial analysis and bankruptcy law on a scale that has rarely, if ever, been attempted. The book distills events that occurred over a number of years. Readers can imbibe lessons that would otherwise be inaccessible to all who had not lived through, and closely monitored, Texas International's ups and downs. In effect, The First Junk Bond is a valuable input into an expert system for securities analysts. Platt has provided a welcome dose of applied research in a field increasingly dominated by abstract theory." Cover 1 Half Title 2 Title Page 4 Copyright Page 5 Dedication 6 Table of Contents 8 LIST OF TABLES AND FIGURES 10 PREFACE 14 ACKNOWLEDGMENTS 16 Chapter 1: Introduction 20 PART I: THE GROWTH YEARS 24 Chapter 2: The Beginning 26 Chapter 3: The Merger with Phoenix Resources 49 PART II: THE PERIOD OF DECLINE 54 Chapter 4: Reacting to Industry Conditions 56 Chapter 5: Egypt and the Khalda Concession 62 PART III: DEATH AND REBIRTH 86 Chapter 6: Three Exchange Offers 88 Chapter 7: Bankruptcy 123 Chapter 8: A Restructured Company 149 PART IV: FINANCIAL LESSONS 162 Chapter 9: Interview with a Fund Manager 164 Chapter 10: Interview with a Stockholder 169 Chapter 11: Analyzing the Company with a Bankruptcy Prediction Model 172 Chapter 12: What Have We Learned? 177 APPENDICES 180 Appendix A: Oil and Gas Industry Basics 180 Appendix B: Oil and Gas Accounting 183 Appendix C: TEI’s Four Divisions 187 Appendix D: Industry Segments 201 Appendix E: Sources of Finance to Oil and Gas Companies and TEI 203 Appendix F: Oil and Gas Regulation 214 Appendix G: Industry Conditions 217 Appendix H: Egyptian Oil and Gas Production History 230 Appendix I: The Khalda Concession Financial Model 232 Appendix J: Original Khalda Concession Terms 236 BIBLIOGRAPHY 240 INDEX 246 ABOUT THE AUTHOR 254 This is the comprehensive story of Texas International Inc., a small domestic oil and gas company that needed new capital resources for growth. It turned to Drexel Burnham Lambert and Michael Milken who engineered the first junk bond issue for this company at high interest rates. The book records the unusual events that befell the company, through its corporate growth and decline, debt exchange offers, bankruptcy, and corporate rebirth as (fittingly named?) The Phoenix Resources Companies, Inc. Readers will find interesting background on the oil and gas industry, as well as discussion of the financial wheeling and dealing that set the precedent for corporate financial innovations in the 1980's. This book offers a valuable innovation of modern corporate finance in the form of a model to predict bankruptcy. Students, scholars, trade market businessmen - all who are interested in the 1990 financial issues including bankruptcy, exchange offers, and corporate reorganization will find Harlan Platt's The First Junk Bond an illuminating case study.