What was the call price at issue

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Reference no: EM133120622

Canada call when abc company originally issued its callable 5.5%, 10 year bond, it was rated AA and priced to sell at par. The bond is callable at the price that offers an equivalent yield to Canada bond plus .15% at that time, the credit spread over 10 year canada bonds was .25% the bond pays intrest annually.

a) What was the call price at issue?

Now at 5 years later the bond ratting agencies have raised the bond rating to AAA and the bonds yield to maturity is 5%. Equivalent maturity canada bonds are yielding at 4.9%

b) What is the current call price

c) Would ABC company consider calling the bond now?

Reference no: EM133120622

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