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003_Worldcom_Qns (1) - major uncertainties that a firm...

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Worldcom, Inc.: Corporate Bond Issuance Questions for Analysis 1. Is it a good time to issue? What factors favor issuing now and what factors do not? 2. What risks does WorldCom face in issuing up to $6 billion in debt? How will investors and the market react to the large size of the offering? Would a series of smaller issues be a better strategy? 3. How does financing with corporate bonds typically differ from a bank loan? What are the
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Unformatted text preview: major uncertainties that a firm faces when it issues securities? 4. Estimate the expected costs (percentage yields) that WorldCom will incur on the 3-, 5-, 7-, and 30-year notes. How would you attempt to explain to someone who is unfamiliar with credit markets why the bonds would be priced in this manner?...
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