GBA Inc. wishes to raise $100,000,000 by issuing a 10 Year Eurobond. The treasurer of GBA is working with an investment bank to arrange the issue. The bonds will be issued in Luxemburg.

The treasurer compiled yield curve and exchange rate data to see if it would be worthwhile to issue the bond in EUR denomination and hedge the interest and principal payments using forward contracts.

Time to maturity	Germany (%)	US (%)
1	3.25	5.05
2	3.30	4.89
3	3.10	4.61
4	2.98	4.44
5	2.85	4.27
6	2.81	4.22
7	2.76	4.16
8	2.74	4.07
9	2.73	4.03
10	2.72	3.98

Currently, EUR/USD is 1.0647. If GBA issues bonds in EUR terms the coupon rate will be 3% and bonds will have a nominal value of EUR 1,000 and will sell at par value (EUR 1,000). The cost of issuing bonds will be 1.75% of the gross amount raised which is the equivalent of USD 100,000,000 at the current spot rate.

a) How much is the principle and net fund?

b) what is the coupon payments?

c) Estimated the AIC EUR bonds

d) Estimate the AIC EUR bonds in USD terms

e) Estimated the credit Spread

Please submit the solution in an excel sheet