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(3) (25 points) Hoopoe Corp. wants to borrow 100M U.S. dollars at a fixed rate with maturity of 5 years. The Eurobond issue has the
(3) (25 points) Hoopoe Corp. wants to borrow 100M U.S. dollars at a fixed rate with maturity of 5 years. The Eurobond issue has the following terms:- Amount 100 M U.S. dollars Interest 10.625% annually Maturity 5 years Commissions 1.25% Agency fees 0.15% on coupon, 0.075% on principal Issue expenses 0.2% A bank has proposed a Swiss franc issue combined with a currency swap in U.S. dollars. The terms of the SF issue is: Amount 200 M Swiss francs Interest 5.375% annually Maturity 5 years Commissions 2.8% Agency fees 0.75% on coupon, 0.30% on principal Issue expenses 0.2% The counterpart of the swap raise fixed dollars on the following terms: 4 Amount Interest Maturity Commissions Agency fees 100 M U.S. dollars 10.625% annually 5 years 1.8% 0.15% on coupon, 0.075% on principal 0.2% Issue expenses The only difference between the 1st and 3rd tables is that now the commission is higher (1.8% versus 1.25%). The exchange rate is 2 SF = 1 $US. The counterpart will be happy with an all-in cost in SF of 6.4%. What is the counter party's cash flow payment
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