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Hi there!
for the sterling eurobond issue, why do we use 4.95% in the interest calculation in appendix 3?
Thought it would be 6.85%. especially since we’re sticking to sterling and not swapping it into $.
(To be honest i’m not sure what exactly is 6.85% either – i assume it’s the coupon?)
thank you very much!!
Also, for (b) sterling fixed rate secured bank term loan,
how do i get the issue of 44.93?
I have seen your other forum (https://opentuition.com/topic/mctee-605/) but i can get neither of the issue 44.93 nor the net (of issue cost) amount of 44.48.
My calculations are 50m / 101% * 100% = giving me a 49.5m issue 🙁
Thank you!!
First question: They do not have to ‘stick to sterling’. It is $’s that they are seeing for the purchase of the gold club, and so if they choose the eurobond it will make sense to swap it and pay lower interest. (And yes, the 6.85% is the coupon rate on the eurobond)
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