easy · Private Credit loan-structures-instruments
A borrower chooses to pay down its high-yield bond early. The bond has a 'make-whole' call provision at T + 50 bps.
If the remaining cash flows (coupons plus principal) have a present value of $1,150,000 when discounted at the comparable Treasury yield plus 50 bps, and the face value is $1,000,000, what must the borrower pay to retire the debt?
- $1,050,000
- $1,200,000
- $1,000,000
- $1,150,000
Sign up free to see the explanation and track your rank →
More Private Credit loan-structures-instruments practice
- What is the blended interest rate paid by the borrower?
- What is the blended interest rate margin the borrower pays on the total facility?
- A fund manager is valuing a senior loan to a private mid-mar… — Under ASC 820, how is this
- A private credit fund is evaluating a 'Unitranche' loan for… — What is the borrower's expe
- Which group is the fulcrum?
- What is the indicative margin for the 'last-out' lender?
- What is the primary risk factor the lender evaluates?
- What is the most plausible reason for the 200 bps 'Non-Sponsor Premium'?