Debt Pricing and IRRs
Return on investment loan in KHR and USD?
$10M senior, unsecured loan. Investment closes on 1/1/2016. Company A is seeking funding in (3-5 year tenor).
-Assume no deal expenses, no capital gains tax, no withholding tax and no leverage used in transaction
-Ignore FX considerations
-Interest 3%
-Min IRR for Company B managed funds is 7% USD
-Company B managed funds deducts 1% of total loan value up front (admin fee), on all loans disbursed
NEED TO RECOMMEND 2 PRICING (INTEREST RATE+FEE) AND REPAYMENT STRUCTURES FOR PROPOSED LOAN, GIVEN CONSTRAINTS GIVEN. WHAT ARE IRRS OF BOTH INVESTMENTS?