Calculating Coupon Rate from given IRR

From Alaska Salvage Question Dec 09:

Alaska Salvage is in discussion with potential lenders about financing an ambitious five-year project searching for lost gold in the central Atlantic. The company has had great success in the past with its various salvage operations and is now quoted on the London Alternative Investment Market. The company is currently financed by 120,000 equity shares trading at $85 per share. It needs to borrow $1·6 million and is concerned about the level of the fixed rates being suggested by the lenders. After lengthy discussions the lenders are prepared to offer finance against a mezzanine issue of fixed rate five-year notes with warrants attached. Each $10,000 note, repayable at par, would carry a warrant for 100 equity shares at an exercise price of $90 per share. The estimated volatility of the returns on the company’s equity is 20% and the risk free rate of interest is 5%. The company does not pay dividends to its equity investors.

You may assume that the issue of these loan notes will not influence the current value of the firm’s equity. The issue will be made at par.

Required:
(a) Estimate, using Black-Scholes Option Pricing Model as appropriate, the current value of each warrant to the lender noting the assumptions that you have made in your valuation.
(b) Estimate the coupon rate that would be required by the lenders if they wanted a 13% rate of return on their investment.
(c) Discuss the advantages and disadvantages of issuing mezzanine debt in the situation outlined in the case.

For part B, I am confused as to why when calculating the cash flows, for years 1-5 where the lender receives interest why is this calculated at 100*Coupon Rate and not 10000*Coupon rate when the loan note is $10000? Is the interest not based on the loan note? Apologies if this sounds a stupid question, I’m just very confused