Goodrich Rabobank Interest Rate Swap
1. How large should the discount (X) be to make this an attractive deal for Rabobank?
2. How large must the annual fee (F) be to make this an attractive deal for Morgan Guaranty?
3. How small must the combination of F and X be to make this an attractive deal for B.F. Goodrich?
4. Is this an attractive deal for the savings banks?
5. Is this a deal where everyone wins? If not, who loses?
Introduction:
Players: Morgan Bank, Rabobank, and B.F. Goodrich, Salomon Brothers, Thrift Institutions and Saving Banks
Goodrich:
In early 1983, Goodrich needed $50 million to fund its ongoing financial needs. However, Goodrich was reluctant to borrow (short term debt) from its committed bank lines because of the following reasons:
1. It would lose substantial about of its remaining short term capital availability under its bank lines.
2. It would compromise its future flexibility by borrowing in the short term.
Instead, it wanted to borrow for an 8 year range (or longer) at a......
View the rest of this paper...
Approximate Word Count: 954
Approximate Pages: 4 (250 words per double-spaced page)
Why should you join Frat Files?
- - It's safe, secure, and private.
- - Instant access to over 100,000 papers. New papers are added hourly.
- - Fast and reliable customer support.
Similar Essays
-
Goodrich Rabobank Interest Rate Swap
Goodrich Rabobank Interest Rate Swap. 1. How large should the discount
(X) be to make this an attractive deal for Rabobank? 2. How ...
Frat Files
Members
Information
