20 years: Equity capital markets
In the first part of this two part series, Mark talked about the way a calculation agent helps the issuer of a convertible to deal with anti-dilution adjustments and settlement calculations. In this video he talks about the two examples of situations in which he as a calculation agent, help issuers deal with complex calculations on their transactions.
In the first part of this two part series, Mark talked about the way a calculation agent helps the issuer of a convertible to deal with anti-dilution adjustments and settlement calculations. In this video he talks about the two examples of situations in which he as a calculation agent, help issuers deal with complex calculations on their transactions.
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7 mins 13 secs
The role of a good calculation agent is much more than typing numbers into a calculator to find the result of a formula. The role requires a thorough understanding of the transaction documents, the market activities that affect transactions, the hedging of transactions, and the processes – both formal and informal – that are needed to make the transaction work and to know how to help the issuer manage all of these items.
Key learning objectives:
Understand how the formula works for fixed rate bonds that include make-whole calls at the time they are called for redemption
Understand how an issuance error is corrected
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When a fixed rate bond includes a make whole call, this feature allows the issuer to repay the bonds early, based on a formula that is designed to approximate their fair value, or a small premium to it, at the time they are called for redemption.
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.