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The focus of the case is on submitting a bid for $11 million of Sceptre Resources Ltd. debentures. The seller had originally received the debentures as part of a work-out agreement after Sceptre took over Oakwood Petroleum in a highly leveraged transaction. The debenture seemed to be the first true "junk" bond issue in Canada - the issue had absolutely no covenants protecting the holder. Sceptre had two other outstanding listed securities, callable convertible debentures, that ranked pari passu with the new debenture, permitting a basis for pricing the debenture. The case is ideal for introducing the concepts of a risk- return trade-off, the bond pricing and securities as bundles of characteristics. (A Microsoft Excel spreadsheet is available for use with this case, product 7A90B051.)