An up-and-coming staffer at a small family foundation was considering whether to recommend a corporate bond investment to the foundation's investment committee. Her exploration was inspired by an article that identified some attractive corporate bond investments, and she was examining the merits of specific bond issues from Allegiant Travel, GameStop, and Western Union. Information is provided that would support a variety of bond pricing analyses, with a focus on uncovering possible mispricing and the drivers of that mispricing.ExcerptUVA-F-1899Feb. 28, 2020Wilson Family FoundationJanet O'Brien had been working in the family office of a central Virginia family-owned business for over five years. Her initial responsibility had been to evaluate proposals that came to the family's charitable foundation, the Wilson Family Foundation (the Foundation), and make recommendations as to which proposals most aligned with the Foundation's objectives and, at the same time, seemed most likely to achieve stated goals. By late 2018, however, she was helping others in the office identify investments for the Foundation's assets.While most of the Foundation's assets were managed by outside professionals, about $ 20million was managed in-house—typically invested in equities, government securities, or corporate bonds. The Foundation tended to adjust its holdings infrequently, and typically held investments for at least a year, and often much longer. The investment committee comprised two family members and the foundation's executive director.On December 21, 2018, O'Brien was scanning headlines and came across a piece in U.S. News and World Report that identified seven corporate-bond investments that professionals believed would make good choices for 2019. Of those seven investments, she was most intrigued by possible investments in the bonds of three companies: Allegiant Travel, GameStop, and Western Union. Having identified specific bonds issued by these companies that the Foundation might wish to hold, her next task was to evaluate each bond's attractiveness and select which, if any, to recommend to the investment committee
