● Assume that LKD Energy, Inc., sold a total of $1.25 billion worth of notes and bonds, and the first tranche issue of $300 million in notes has the following terms:

Settlement date: 7/16/2019 First payment: 2/1/2020 Maturity: 8/1/2024 Coupon: 5.90%

Price: 99.864 Yield: 5.931%

Spread: 90 basis points above U.S. Treasury notes Make-whole call: 15 basis points above U.S. Treasury notes Ratings: Baa2 (Moody’s); BBB (S&P)

If these notes were called immediately, what price would LKD Energy have to pay to these note holders? To calculate the make-whole call premium of these notes, we need to add 15 basis points to the yield of comparable-maturity U.S. Treasury notes.