hard · Debt Capital Markets pricing-yields-curve
An issuer has two outstanding bonds: a 4-year bond at Z+120 bps and a 6-year bond at Z+150 bps. The issuer wants to price a new 5-year bond.
Using linear interpolation for the fair value and assuming a new-issue concession of 10 bps, what is the expected reoffer spread?
- 145 bps
- 140 bps
- 160 bps
- 135 bps
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