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Nortel NetworksNATHAN DENETTE

Investors stuck with shares in Nortel Networks Corp. still have nothing to cheer about, even after Google Inc. offered the company $900-million (U.S.) for its 6,000 patents. On the other hand, Nortel bondholders are looking very good right now.

Nortel filed for bankruptcy protection in January, 2009, and has since been shedding assets at an impressive pace. Fourth quarter results, released in early March, showed that revenue shrivelled to a mere $28-million - down from fourth quarter revenue of more than $2-billion as recently as 2008.

The company has said repeatedly that the creditor protection proceedings will likely render the common shares and preferred shares worthless. However, Bloomberg News reported that Nortel's 2016 10.75 per cent bonds, due 2016, are in another realm: They rose to 93 cents on the dollar on Monday in New York.

That's up from a low of about 14 cents in early 2009, during the depths of the financial crisis. While bonds are usually a fixed income investment, they fell so low that they began to take on equity-like characteristics, with higher risk and reward built into the price. Indeed, anyone with the fortitude to buy these bonds at the low are now up about 550 per cent.

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