- This topic has 3 replies, 2 voices, and was last updated 9 months ago by
John Moffat.
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Mahrukh
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Hello John,
Is there an issue cost on subsidised loan as well, as there is on normal borrowing? What to do if nothing is stated clearly?
Thanks 🙂
John Moffat
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There is unlikely to be an issue cost (because it is a loan normally being given by a government. It is only when there is an issue of debt borrowing that there will be issue costs involved).
If nothing is stated then there are no issue costs.
Mahrukh
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Exactly, I thought the same. But there is a question fubuki co dec 2010 where examiner has taken issue costs on subsidised loan as well, wonder why?
Thanks for your assistance.John Moffat
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Because the question says that the issue costs are 4% of the gross finance required. It does not distinguish between the finance raised from the subsidised loan and that raised from the issue debt.
Mahrukh
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