Levante 12/11

the following questions are more conceptual.

1. when he says “issue new bond at a fixed 5% coupon, but at a premium or discount, whichever is appropriate to ensure full take up…”

“full take up” actually means that when all the bonds are sold, we get the full amount, i.e. 150m in this case.
Correct?

2. assuming redemption at par, it gives an MV less than par, therefore there will not be full take up. correct?

3. so, in this case to ensure full take up we will need to redeem at a premium so as to ensure that the MV is at least a 100 – since it says coupon of 5% is fixed. the only thing left to play with is the redemption. correct?

side note:

at first i took ‘full take up’ to mean whether the investors will buy ALL of the bonds. and that got me thinking: if i have a choice of buying a bond at 88 or a bond at 103, which one wd i buy?

can u shed some light on this please.

regards