Tut 5 - Debt Markets 2

Tut 5 - Debt Markets 2 - BANK1005 Derivatives and...

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BANK1005 Derivatives and Securities Markets Page 1 of 6 Tutorial 5 (Week 6) – Debt Markets 2 © HB, August 2007 Preparation for This Tutorial You should complete your study for this tutorial by using the relevant lecture notes, textbook and other resources. You will need a calculator during the tutorial. Have a good understanding of the key words used in this tutorial. In particular, for this tutorial you should: s Complete the study required for this tutorial (from the lecture notes, textbook and any other resources). Know the key words. s Record the formulas (and equations) for pricing a bond and finding its yield (if you are going to use these formulas). Alternatively, be able to use your financial calculator. Activity 1 Silver Chef Limited – Convertible Notes In 1986, Allan English established a company providing conveyor ovens to the growing home delivery pizza business industry. To achieve greater market awareness and market share, a rental division was established. In 1995, the business, which had offices in five States and sales revenue of $22 million, was sold. Allan English retained the rental division as part of the transaction, and has continued to expand the Silver Chef rental business. The company provides equipment rental predominantly to the food service sector (restaurant and fast food). More recently, the company has expanded into medical equipment and cleaning equipment sectors. In a prospectus dated 12 April 2005, the Chairman, Andrew Kemp, invited investors to “acquire either Shares and/or Convertible Notes in the Company. The Offer Price for both Shares and Convertible Notes is $1.00 each. Access to further funding sought through this Prospectus will enable Silver Chef to continue to expand its rental receivables throughout Australia.” (Source: Silver Chef Limited, Prospectus dated 12 April 2005, pages 5 and 15) Here are some details of this Offer from the Prospectus dated 12 April 2005, issued by the company. Purpose of the Offer The purpose of this offer is to raise up to $8 million through the issue of 3 million Shares and up to 5 million Convertible Notes, the net proceeds of which will be used to expand the business of Silver Chef nationally in its core area of providing equipment rental services. (Source: Silver Chef Limited, Prospectus dated 12 April 2005, page 8)
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This note was uploaded on 10/19/2011 for the course BANK 1005 taught by Professor Hb during the Three '09 term at South Australia.

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Tut 5 - Debt Markets 2 - BANK1005 Derivatives and...

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