Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Could you please rephrase the following passage, and keep it as he same length Jack Ma and his investment bank chose to break up the

Could you please rephrase the following passage, and keep it as he same length

Jack Ma and his investment bank chose to break up the bond issue into 5 different tranches as by doing so it was able to spread out the maturities in the offering and hence was able to lock in its financing costs for several years. The duration range of the tranches was from 3 years to 20 years and this gave Jack Ma and Alibaba to take advantage of having multiple maturities. Also by issuing their bond in tranches they smartly made their bonds more attractive for investors. This is because tranches allow investors to create a single or several classes of securities with a higher rating than the underlying asset pool. It also allows the investors to match their investments with their needs. Some investors need a long term steady cash flow while some investors need short term cash flow. The benefit of the 6th tranche with a floating rate note denominated in Singapore dollars was that it enabled Jack Ma and Alibaba to match its decision of raising money through bonds with its expected operating activities. This will help Jack Ma and his company to better manage interest rate risks that it is exposed to.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management EMEA Theory And Practice

Authors: Michael Ehrhardt, Roland Fox, Eugene Brigham

2nd Edition

1473760216, 9781473760219

More Books

Students also viewed these Finance questions

Question

Discuss how technology impacts HRD evaluation

Answered: 1 week ago