Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need three examples of each type of risk associated with the following transaction: Pretend we are in 2021 Bank A is going to loan

image text in transcribed
I need three examples of each type of risk associated with the following transaction: Pretend we are in 2021 Bank A is going to loan 800 million dollars in a 6 yr term loan B to a Venezuelan company. And at the same time Bank A will provide an 800 million dollars notional swaps to fixed interest rate hedge with MPE of around 200mm. In Jan 2022, the term loan b will be taken out with a 800 million high yield bond. Bank A's ask is to have the 800 on hold until Dec 2021. The Venezulan company in 2016 completed its IPO and is listed on the Venezuelan Stock Exchange. In June 2021, the company had a market cap. of 1.3 bi and property value of around 2.4 bi on their balance sheet. Credit, Market, Model, Liquidity and Operational!!! So three risks from this transaction associated with each type!! So 3 examples on credit, 3 on market, 3 on model, etc etc I need three examples of each type of risk associated with the following transaction: Pretend we are in 2021 Bank A is going to loan 800 million dollars in a 6 yr term loan B to a Venezuelan company. And at the same time Bank A will provide an 800 million dollars notional swaps to fixed interest rate hedge with MPE of around 200mm. In Jan 2022, the term loan b will be taken out with a 800 million high yield bond. Bank A's ask is to have the 800 on hold until Dec 2021. The Venezulan company in 2016 completed its IPO and is listed on the Venezuelan Stock Exchange. In June 2021, the company had a market cap. of 1.3 bi and property value of around 2.4 bi on their balance sheet. Credit, Market, Model, Liquidity and Operational!!! So three risks from this transaction associated with each type!! So 3 examples on credit, 3 on market, 3 on model, etc etc

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

Students also viewed these Finance questions