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Convertible notes and their conversion price to common shares

I know this may sound insane but I am investigating a company I have shares in and have discovered that they converted USD 3200 in loans from friends and officers with a conversion price of ...
Robert Stewart's user avatar
0 votes
1 answer
38 views

How would one calculate yield to first call for a debt security which is currently and always callable?

If an asset manager has multiple extended warehouse lines outstanding and each one is currently callable (some with penalties, some without), is it simply the case that a ‘to first call’ performance ...
slothish1's user avatar
1 vote
1 answer
56 views

Determining fair interest rate for an unsecured loan with a non-refund clause

A startup company is doing a share transfer between a new co-founder and existing co-founders. The new co-founder will purchase the shares from the existing co-founders through a loan agreement ...
Mikael Törnwall's user avatar
0 votes
0 answers
65 views

Cost of debenture using IRR method

Question: A company issued $10000$, $10\%$ debentures of $\\\$100$ each on 1.4.2020 to be matured on 1.4.2025. Market price of the debenture is $\\\$80$. Tax rate is $35\%$. Then what would be the ...
Hmmmmm's user avatar
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1 vote
0 answers
72 views

How can I correctly assess the risk of real estate debt fund? [closed]

I'm trying to assess the attractiveness of real estate debt funds. I'm very surprised when I look at the investment performance of many of those funds. Many of them have no negative returns, and can ...
Literal's user avatar
  • 111
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0 answers
88 views

Derive the Probability of Default (PD) of private companies with Merton Model

Do you know a well used method how to calculate the PD of private companies using the Merton Model. The main challenges I am facing is to get the appropriate volatility of the assets and the drift. ...
Bsleon's user avatar
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1 vote
0 answers
55 views

Warren Buffett about the long term debt [closed]

In the book Warren Buffett and the interpretation of the financial statements, Mary Buffett explained companies that have enough earning power to be able to pay off their long-term debt in three or ...
J.Doe's user avatar
  • 73
1 vote
1 answer
218 views

How to get started with ABS?

I am reading about ABS avoiding esoteric instruments with complex structures and I want to learn about pricing methods and trading of these instruments thinking about futures applications for ...
Andrés Felipe Echavarría's user avatar
1 vote
1 answer
697 views

Does a bond pay a coupon at maturity? [closed]

I know a bond pays an annuity cashflow of coupon payments and then at maturity it pays the face value. But, at maturity, does it pay an additional coupon payment on top of the face value or are we ...
Sierra's user avatar
  • 11
4 votes
1 answer
731 views

Debt seniority and probability of default

I would like to ask if different debt seniorities ( like senior unsecured bonds and subordinated bonds) have different probability of default? (Before edited I used debt tiers instead of seniority but ...
user58873's user avatar
0 votes
0 answers
36 views

Remaining Balance Formula for Actual/360 and Actual/Actual Accrual Methods

Is there a concise formula for calculating the remaining balance of a loan with actual/360 and actual/actual accruals? I know for 30/360 amortizations, the remaining balance is just the FV of the ...
ZAR's user avatar
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1 answer
194 views

How to write a javascript formula for the time to clear debt on a credit card calculator?

I have a web developer creating a credit card calculator in Javascript and need a formula to use for calculating the time to clear debt based on inputs of balance, APR, minimum repayment per month (%) ...
Andrew Maidstone's user avatar
1 vote
3 answers
378 views

Understanding Loans with a Dynamic Principal

A classic bond/loan has a clear-cut structure, a static principal $P$ and a coupon/yield $y$ (calculated off the static principal). Now surprisingly mortgage / car / etc loans seem to have a ...
A.L. Verminburger's user avatar
0 votes
1 answer
287 views

How is the present value of tax shield of constant and perpetual debt derived? [duplicate]

According to this site, the present value of tax shield of constant and perpetual debt is: corporate tax rate × interest payment ÷ expectd return on debt I understand the part about "corporate ...
Aqqqq's user avatar
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0 answers
37 views

Why does lower interest rate result in higher debt issurance?

Is it because lower interest would reduce coupon rate since coupon rate have to be higher than the interest rate to remain attractive for debtholders? For reference: https://marketrealist.com/2014/03/...
Aqqqq's user avatar
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-1 votes
1 answer
54 views

Is a company's exact debt structure publicly available to investors?

I am relatively new to investing and would like to look into some of the details of a few companies. As one example, we can use DAL. To assess the financial future of the company, it would be ...
don't train ai on me's user avatar
2 votes
2 answers
294 views

How does the Collateral in Collateralized Loan Obligations (CLOs) Work?

I am trying to understand, in its simplest form, how the collateralized loan obligations (CLO) work. I refer to an article in The Atlantic for those who are interested in learning about CLOs. The way ...
Frank Swanton's user avatar
1 vote
0 answers
104 views

Quant valuation of a credit card debt (or flexible loan)

What would you say is the generally accepted quantitative method of valuing an individual credit card, or flexible loan? Is the method very changeable if that were a pool of such loans? Suppose the ...
Attack68's user avatar
  • 11k
3 votes
3 answers
18k views

Why do not include loan payments in NPV?

Textbooks in finance claim that one should not include financial cashflows in capital budgeting. I get the idea of not including interest (as it should be included in the cost of capital), but I don't ...
ffsffs's user avatar
  • 33
7 votes
2 answers
1k views

How exactly are corporate bonds priced at issue

I am interested in Debt Capital Markets but I am struggling to understand how bonds, particularly corporate bonds, are priced initially. I know that a company will tap an investment bank as book ...
MinaThuma's user avatar
  • 459
4 votes
2 answers
1k views

Criteria to assess the possibility of corporate bankruptcies in U.S. equity exchange markets [closed]

Which criteria do you suggest to measure the susceptibility of bankruptcies (e.g., Chapter 11, 7) for a company in a U.S. equity exchange market (e.g., NYSE, ...
fgauth's user avatar
  • 329
-1 votes
1 answer
48 views

can a country replace its debt with a low interest loan?

Recently in my country, someone started a buzz in which he had plans to replace current debt of the country with low interest loans from other countries such as Japan. May I know if this is possible ...
psaw.mora's user avatar
2 votes
1 answer
156 views

Objective measure of highly leveraged firms using Debt-to-EBITDA ratio

I am looking for some kind of guidance what is generally considered a high or low ratio of Debt-to-Earnings before interest, tax, depreciations and amortisations (EBITDA). In a recent article by The ...
hannes101's user avatar
  • 163
1 vote
1 answer
92 views

Calculating a firm's cost of debt using bond issues

When a firm issues coupon bonds that are traded on the open market these bonds can trade at either a premium or discount during the lifetime of the bond. If, for instance, the bond trades at a ...
Dmitriy's user avatar
  • 75
0 votes
2 answers
84 views

Why is there a need for Libor in the UK

In the US, the Fed determines the federal funds rate, which is used by banks to lend money to each other. In the UK, I am assuming the Central Bank has the same role. So why then is there a need for ...
bsky's user avatar
  • 185
0 votes
1 answer
310 views

Boeing's Debt-to-Equity Ratio

Background I was quickly investigating Boeing's (BA) Debt-to-Equity ratio and received a very high number. I looked around online and have confirmed that BA has recently taken on a lot of debt, but ...
jonplaca's user avatar
  • 113
-1 votes
1 answer
80 views

Pricing Debt/Credit/Mortgage+ Prepayment- Literature?

Does someone know some good literature(Papers or Books) regarding the topic how to Price debt/credit with prepayment? I just found literature about the general topic , like how to price callable bonds,...
Kosta S.'s user avatar
  • 209
1 vote
3 answers
1k views

Why somebody buy the defaulted loans?

Why somebody buy the defaulted loans from the banks, if the debtors can not pay back their debt? If I bought these loans I will cause losses myself, because nobody will pay me (or just a lower price ...
blackcornail's user avatar
3 votes
0 answers
134 views

Borrower, platform, SPV relationship with borrower payment dependent notes?

As you know, real estate crowd funding platforms are taking off at the moment. Platforms connect investors to real estate assets. I am having an issue with understanding how exactly borrower payment ...
user3138766's user avatar
0 votes
1 answer
55 views

Compound and continuous interest in the context of debt

I'm trying to figure out the concepts "compound and continuous interest". This article explains the material very well in the context of a savings account. However, I find it difficult to ...
Evan Aad's user avatar
  • 481
1 vote
1 answer
3k views

ABS vs covered bonds vs CDO [closed]

What is the difference between asset-backed securities(ABS), covered bonds and collateralized debt obligations (CDO)?
CaffeRistretto's user avatar
1 vote
2 answers
194 views

Unrecovered debt

When reading an article about banking industry I came up with two questions. I'd be very pleased If somebody could clarify them: How concepts of unrecovered debt and NPL are related? When banks ...
Yury Morozov's user avatar
2 votes
0 answers
81 views

Collateralized Loan Obligation - reliable source of information

Can someone provide me with some reliable source of information about CLOs? Especially some scientific articles etc. Google or wiki are good for starters and I would like to get some examples, ...
Ascorpio's user avatar
  • 339
1 vote
0 answers
89 views

How to value a portfolio of non-mature consumer loans?

I'm looking for the best way to value a portfolio of consumer loans that have NOT reached maturity and for which I do observe the payment/default history to date? I'm working with a large database of ...
Bobak Digital's user avatar
-1 votes
1 answer
1k views

Difference between Total Long Term Debt and Net Total Long Term Debt

What is the difference between Total Long Term Debt and Net Total Long Term Debt? Below you can see a picture revealing that they are not equal.
ExoticBirdsMerchant's user avatar
0 votes
1 answer
810 views

How to calculate the pre-tax cost of debt for a mix of bonds allotted to a company?

I need to calculate the effective interest rate a company X is paying on the total debt it has been loaned (to arrive at the Cost of Debt) for the FY 2011-12. Its long term borrowings are a mix of ...
brchan's user avatar
  • 3
1 vote
1 answer
190 views

Debt vs. Equity?

What determines whether an investment should be made using debt vs. equity? For example, startups are often financed with equity, while mortgages are always financed using debt. What characteristics ...
Bedeho Mender's user avatar