Fixed Income Assignment 5

Assignment 5

The questions in this assignment are about Lear, a public company based in the United States. You can find the information that you need to answer Questions 1 and 2 in the most recent quarterly (10-Q) financial statement that the company filed with the SEC.

Question 1

A. What type of loan does the company have?

B. How big is it? Can the company borrow any additional funds? If so, how much more can they borrow?

C. Is it secured or unsecured? If it is secured, what is the collateral?

D. What is the interest rate on the loan? Is there a pricing grid for the interest rate? If so, what is it?

E. Are there any other fees on the loan in addition to the interest rate?

F. When does it mature? Are there any required prepayments?

G. What types of covenants does it have?

Question 2

A. How many different bonds does the company currently have outstanding?

Two.

B. What are the maturities for each bond? Are they senior or subordinated?

2018. Senior.

2020. Senior.

C. How much of each bond is currently outstanding?

$315 million of both the 2018 and 2020 notes. However, the combined total given as of September 29, 2012 is $626 million.

D. Are the bonds callable? If so, when is each one callable? At what prices?

Yes, and both are apparently callable whenever. They are callable at 103% of the aggregate principal amount redeemed, plus accrued and unpaid interest.

E. Are the bonds secured?

No.

F. What types of covenants do the bonds have?

G. Are the bonds guaranteed by anything?