DONALD PAUL NEEDHAM
400,000 x 27
21,600 Stocks total Issue authorized by law, at a stated value of $ 10,800,000,000
400,000 x 27
43,200 Stocks total Issue authorized by law, at a stated value of $ 26,000,000,000 at 500 each
400,000,000 x 27.
2,160,000 AT 10,800,000,000
4,320,000 At 21,600,000,000
at $5,000.00 each.
Description of Property
27 Countries with 27 Sovereigns
Estates
Municipal Courts District
AND: Market makers
27 owners of Stock in Titles and Names
25% each
………………………………………..Corporate…………Intermediary…………..Corporate
Time……….Payment………………FERN…………….Market maker…………….AUST
0……….Original Loan Proceeds………………………………………………………… 100
…………AUST To market maker……………………………..100……………………. (100)
…………Market maker to FERN…..100……………………(100)…………………………..
…………….Net……………………………100……………………….0………………………….0
YEAR 1.Interest payments:
…………..FREN to market maker…(15.2)………………15.2………………………………
…………..Market maker to AUST………………………….(15.0)………………………….15
…………..AUST to investor……………………………………………………………………..(15)
Year 1
Cash flow…………………………………84.8……………….. .2 ……………………………….0…..
Year 2……Interest payments
…………….FREN To market maker.(15.2)………………. 15.2 ………………………………….
…………….Market maker to AUST………………………….(15.0)……………………………….15
…………….AUST to investor……………………………………………………………………………(15)
…………………Net………………………(15.2)……………….. .2 …………………………………….0
……………..Principal payments:
…………FREN to market maker…..(100)……………….. 100………………………………………..
…………….Market maker to AUST………………………….(100)……………………………….100
…………….AUST to investor………………………………………………………………………….(100)
…………………Net principal………….(100)……………….. 0 ………………………………………0
Year 2
Cash flow………………………………..115.2……………….. .2……………………………………..0
Total net
Cash flow……………………………….. (30.4)…………….. .4 ………………………………………0
………………………………………………………….Company……………Company………………….
…………………………………………………………. AAA……………………….B………..Difference
Five Year Fixed…………………………………… 11%…………………….. 13%……….. 2%
Credit spread for short term libor…………… 1/2%……………………… 1%………… 1/2%
Company AAA Cost of short-term debt
RATE paid on long-term debt issued……………………………11%
Rate received on long-term debt…………………………………12%
Rate paid on short-term Libor Debt……… Libor + 1/2%…..9.5%
Effective rate paid on short-term debt…… Libor-1/2% ……. 8.5%
Company AAA Cost of 5 year debt
RATE paid on long-term debt …………………………………..12.0%
Rate paid on short-term Libor Debt……… Libor + 1%…..10.0%
Rate received on short-term libor debt…. Libor + 1/2%….(9.5%)
Effective rate paid on short-term debt…… …………………… 12.5%
…………………5Year rates %……180-day Rates, %
Government…10.75…………………..11.00
Corporate AAA.11.00………………..11.10
Corporate B…… 13.00……………….11.70
Market makers interest-rate Swap market
………………………………………3-year……………..5 year
Government Bond yield……10.05-10.10%…10.35-10.42%
Swap spread………………. …..70-.75%…………. .75-.80%
All-in swap rate…………….. ..10.75-10.85%…….11.10-11.22%
Rate paid on long-term debt……..10.30%
Rate received on swap………(10.75%)
Net Gain……………………………. .45%
………………………………….Interest Payments Received/(Paid)
(who takes floating-rate debt in return)
…………..6-month…………………………..fixed…………floating
Month……Libor, %. …instrument………..Portion…………Portion……………Net
6……………..10…….. to Bondholders…(10.30)……………………………….(10.30)
………………………….(to)/from swap……10.75……….(10.00.)………………..75…
………………………………..net cost………. .45……………(10.00)…………….(9.55)
12……………14………. to Bondholders…(10.30)……………………………….(10.30)
………………………….(to)/from swap……10.75……….(14.00.)………………..3.25..
………………………………..net cost………. .45……………(14.00)…………….(13.55)
18………………6………to Bondholders…(10.30)……………………………….(10.30)
………………………….(to)/from swap……10.75……….(6.00.)………………..4.75…
………………………………..net cost………. .45……………(6.00)…………….(5.55)
………………………………….Interest Payments Received/(Paid)
(who takes floating-rate debt in return)
…………..6-month…………………………..fixed……………floating
Month……Libor, %. …instrument………..Portion…………Portion……………Net
6……………..10…….. libor to market rate…………………(10.30)………….(10.30)
………………………….libor credtit spread……=……………(1.00.)……………(1.00)…
………………………….(to)/from swap……10.85……….(10.00.)………………..(.85)..
………………………………..net cost………. (10.85)…………..(1.00)…………….(11.85)
12……………14………. libor debt……………………………(14.00)……………….(14.00)
………………………….libor credit spread……………………(1.00.)……………(1.00)…
………………………….(to)/from swap…………10.85……….(14.00.)………………..(3.15)..
………………………………..net cost……….(10.85)……….(14.00.)………………..(11.85)..
18………………6………libor debt……………………………(6.00)……………….(6.00)
………………………….libor credit spread……………………(1.00.)……………(1.00)…
………………………….(to)/from swap…………10.85……….(6.00.)………………..(4.85)..
………………………………..net cost……….(10.85)……….(1.00.)………………..(11.85)..
Forward Book’s P&L
LIQUIDATED: GAINS LOSS
BAsed on EXCHANGES AROUND THE WORLD
And at the buy downs and of COMPANIES at GOVERNMENT
