Hi John
In Sep/Dec 2016 Q1 forecast PAT for the coming year . As the first director's proposal why do we calculate" interest saved due to lower borrowing" with the nominal interest rate at 6.2% but the new Kd 4.4%?
And the opportunity benefit(120x20%x(4.7%-4.4%)) as the remaining 20% from NCL(120m) paying a new lower Kd rate (4.4%) compare with the current Kd at(4.7%). Was not included in the forecast PAT.
As the second director's proposal the forecast PAT does not include the additional interest on exiting NCL(120x(6.2%-4.7%)) paying a new higher Kd at (6.2%) compare with the current lower Kd 4.7%?
Thanks
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Sep/Dec 2016 Q1
8y ago#1The fact that the interest on new debt will change, will not affect the coupon rate on the existing debt.
The existing debt carries interest at 6.2% on nominal, and they will have to continue to pay 6.2% on the nominal value of the debt not repaid.
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