Bonds

Outstanding Bonds

Series Number Label given to a bond when it was issued. The first numbers are the interest rate. S means series, and the last four digits refer to the year the bond is due. 15.4S2008 means that the bond pays a coupon 15.4% each year and that the principal is due in 2008.

Face ($000) Principal of the issue. If the face is $11,040, then $11.04 million in bonds were issued. Using the 15.4S2008 example, coupons of 15.4% or a total of $1,700,160 will be paid each year until the bond becomes due in 2008. In 2008, the last coupon and the principal are due. The principal is converted automatically to Current Debt on December 31 of the year it is due.

Current Yield A measure of what the bond is worth at current interest rates. To calculate, the stated interest rate is divided by the closing bond price. For example, if the stated interest is 15.4% and the closing price is $115.80 then $15.40 divided by $115.80 gives a yield of 13.3%.

Closing Value Closing price of the bond last year. Bonds are bought and sold in the marketplace, but since their interest payment is fixed, the price of the bond fluctuates. A bond rating is made for each firm, ranging from AAA (best) to D (worst). For each lower grade, investors expect an additional 0.5% yield. The spreadsheet adjusts the closing price of the bond so that the yield reflects current interest rates and an appropriate risk.

Long Term Debt

Retire Long Term Debt Face amount of the bonds you wish to retire. Oldest bonds are retired first. Bonds are bought back at their street price. Brokers charge a 1.5% fee to retire bonds before they mature.

Issue Long Term Debt Face amount of the bond your team wishes to issue. Bonds are due in 10 years. Banks refuse to give credit when debt/assets exceeds 0.8. Brokers charge a 5% fee to issue bonds.

Long Term Interest Rate Interest rate companies pay on new bonds. The interest rate is a function of the bond rating and the current prime rate.
Maximum Issue This Year Upper limit on the amount of long term bonds that can be issued this year.