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  • June 1992 (Revised June 1995)
  • Case
  • HBS Case Collection

RJR Nabisco Holdings Capital Corp.--1991

By: Peter Tufano
  • Format:Print
  • | Pages:10
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Abstract

An investment manager notices a large apparent discrepancy in the prices of two nearly-identical bonds issued in conjunction with a major leveraged buyout. The manager must figure out whether the instruments are mispriced relative to one another, and if so, how to capture arbitrage profits from the temporary anomaly. The case introduces students to a wide variety of instruments ranging from very simple treasury strips to P-I-K debentures. Encourages students to devise "arbitrage" positions and understand the degree to which these positions are riskless.

Keywords

Asset Management; Financial Instruments

Citation

Tufano, Peter. "RJR Nabisco Holdings Capital Corp.--1991." Harvard Business School Case 292-129, June 1992. (Revised June 1995.)

About The Author

Peter Tufano

Finance
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