Question
could anybody help me with this case ? Corporate Yield Curves case study: You are an intern with Enel Generacion Chile, the largest electric utility
could anybody help me with this case ?
Corporate Yield Curves
case study:
You are an intern with Enel Generacion Chile, the largest electric utility company in Chile, in their corporate finance division. The firm is planning to issue $100 million of 7.875% annual coupon bonds with a 10-year maturity in the United States. The firm anticipates an increase in its bond rating.
Your immediate superior wants you to determine the gain in the proceeds of the new issue if the issue is rated above the firm's current bond rating. To prepare the necessary information, you will need to determine Enel Generacion Chile's current debt rating and the yield curve of their particular rating.
1. You begin by finding the current U.S. Treasury yield curve. At the Treasury Web site (www.treas. gov), search using the term "yield curve" and select "Daily Treasury Yield Curve Rates." as the type of interest rate and "Current Month" as the time period. Highlight the entire data table including the headers, copy and paste it into Excel.
Remember to use "Match Destination Formatting (M)" as the paste option.
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