JAGUAR CASE STUDY --- PROPOSED QUESTIONS

1: What factors might have enabled JLR to raise new debt at less than half the coupon rate of interest in 2015, compared with the debt raise in 2011?

2. Compute the amount at which existing bondholders might be willing to surrender their holdings.

3. Assuming JLR purchased all existing outstanding bonds at the price worked out in Q2; work out the incremental cash flows of this bond issue vis-a-vis the original issue. Does this financing strategy result in cost savings for JLR?

4. What other benefits, if any, might accrue to JLR as a result of this financing strategy? Does this strategy add value to the firm? To the existing bondholders?To JLR's equity-holders?