rjm77me's Blog : MT under water for financial Engineering

12/27/2010

Arcelor Mittal buys call options for 26.5 mln of its shares and sells 11.5 mln treasury shares (37.39 +0.16) Co acquired call options on 26.5 mln of its own shares with a strike price of $30.15 per share. The 26.5 mln call options acquired allow ArcelorMittal to hedge its obligations arising out of the potential conversion of the 5% US-dollar denominated bonds convertible into or exchangeable for new or existing ArcelorMittal shares due May 15, 2014. Co also entered into an agreement on Dec 18 to sell 11.5 mln treasury shares through an over-the-counter block trade for a price of $37.8682 per share, for settlement on Dec 30.

At that time stock price was $37 not cut by 50% - meaning all those call options under water - specifically the 15 million shares (after substracting 11.5 mllion shares sold) Float:= 910.95M

I wonder where to find the accounting for this kind of finacial engieering