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What is the effective interest cost for the first year

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Reference no: EM132772993

Problem 1: Petrol? Ibérico, a European gas? company, is borrowing ?$700,000,000 via a syndicated eurocredit for six years at 90 basis points over LIBOR. LIBOR for the loan will be reset every six months. The funds will be provided by a syndicate of eight leading investment? bankers, which will charge? up-front fees totaling 1.3?% of the principal amount. What is the effective interest cost for the first year if the annual LIBOR is 4.20?% during the first six months and 4.50?% during the second six months.

Reference no: EM132772993

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