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Sigria 2 BPP 42

This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.

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August 12, 2018 at 11:12 am #467419
richardscully
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If a bond is given for purchase of a company, who pays back that money? Who pays the interest?
August 12, 2018 at 2:20 pm #467446
John Moffat
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The company that issues the bond – i.e. the acquiring company. They have to pay back the bond on maturity and they have to pay the interest on it.
August 12, 2018 at 5:33 pm #467456
richardscully
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Oh…..so the acquiring company takes out a loan and the loan is paid back by the combination?? debt financed??
August 13, 2018 at 5:57 am #467646
John Moffat
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No they do not take a loan! By issuing debt to the shareholders of the target company, they are owing money to those shareholders as opposed to having paid them cash.
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