Valuing Long Term Debt

FishSauce · November 14th, 2003, 2:15 am

Hi Guys, I have a question. Say I have $151 million in Long term Debt (Senior Note 12%)... how do I go about valuing this debt, i.e. market value of debt.Thanks in advance,FishSauce.

Paka · November 14th, 2003, 8:17 am

Hi FishSauce:Obtian Treasury zero curve, add risk premium based on the Note's credit rating, then just get the discount value of the Note's future cash flow, i.e., 12% coupon and at maturity, the face value.Hope this helps.Paka

laosun · November 14th, 2003, 8:22 am

As you valuate the fix rate branch of a interest rate swap!