medium · Debt Capital Markets pricing-yields-curve
An issuer is planning a new 7-year bond. Its 5-year secondary bonds trade at a Z-spread of 110 bps and its 10-year bonds trade at 140 bps.
If the DCM desk estimates a fair-value interpolation and adds a 10 bps new-issue concession (NIC), what is the expected reoffer spread?
- 150 bps
- 122 bps
- 132 bps
- 135 bps
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