Assignment for Chapter Three: Ford Motor Credit Company
As you realize corporations issue long-term debt in the form of bonds all the time. In Chapter Three we are told that there are different characteristics of these bonds that affect their yields. Given the following bond listing for Ford Motor Credit Company, list and explain the debt characteristics (Credit (default) risk, Liquidity, Tax Status, Term to maturity, Call feature, Conversion feature) as they relate to this bond and if they are adding or subtracting from the yield on this bond.
There is in D2L a copy of Moody’s recent report on the Ford Motor Credit Company’s Bond that will help you with your answers.
Ford Motor Credit Company
OVERVIEW
Price: $99.350 per $100 of par value
Coupon (%): 4.903%
Maturity Date: 20-Aug-2023
Yield to Maturity (%): 4.395
Current Yield (%): 4.278
Moody’s Ratings*: Baa2
Coupon Payment Frequency: Semi-Annual
First Coupon Date: 20-Feb-2019
Type: Corporate
Callable: No
* https://research.ameritrade.com/grid/wwws/common/reports/moodyreport.asp?YYY600_SDMuF4C9fhdMSyFm95jfK3MHDKn4rQdNQ7qgwxEiOaKp+TRWk2mcNgIbEGpA88hVRj1yQqvUbMLIXpNav8DLItWr/hANUUDIgc+YYB6vPXQx47ORI2LYfA==&c_name=invest_VENDOR
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