FIN683 Investment Analysis

Part 1 A non-investment grade (e.g., junk or high-yield): Carnival Corp – CCL.GC Evaluate the credit quality of your non-investment grade-rated bond. In your post, describe the following with respect to your non-investment grade rated bond: Part 2 As the financial advisor at a money management firm, you have been asked to respond to a request from the client holding the bond portfolio you constructed in Week 1 (Listed below). The client has asked to include asset-backed securities in the portfolio. Select two asset-backed securities for consideration by the client and present them in your discussion post. In your post, describe the following: Issuer Convertible or non-convertible Coupon Maturity Credit rating Last price – sale Last price – yield Callable? Puttable? Schwab Charles Corp Convertible 3.25% 10/01/24 A $110.36 -1.793% Yes No T-Mobile USA Inc – Non-convertible 6.500% 01/15/26 NR $103.18 5.074% Yes No Kraft Heinz Foods Co Non-convertible 3.00% 06/01/26 BB+ $106.52 1.543% Yes No Carnival Corp Non-convertible 7.200% 10/01/23 B- $107.53 3.658% No No Chobani LLC Non-convertible 7.500% 04/15/25 CCC $104.21 4.310% Yes No CVS Health Corp Non-convertible 6.125% 09/15/39 BBB $137.77 3.339% Yes No Nissan Motor Co., LTD Non-convertible 3.043% 09/15/23 BBB $104.38 1.027% Yes No SHERWIN-WILLIAMS CO Non-convertible 5.500% 10/15/27 BBB $100.03 5.497% No No Requirements: No minimum for each part | .doc file Seniority ranking of the bond. Capacity, as evidenced by the following ratios:
EBITDA margin
Return on capital
Debt/capital
Debt/EBITDA
FFO/debt
FCF after dividends/debt
EBITDA/interest expense
EBIT/interest expense EBITDA margin Return on capital Debt/capital Debt/EBITDA FFO/debt FCF after dividends/debt EBITDA/interest expense EBIT/interest expense Your proposed two chosen asset-backed securities for consideration. Include a chart like the one below, with the main characteristics of the two chosen securities. Your methodology for choosing the two securities. State the bond that you will remove from the client’s portfolio in exchange for the asset-backed security. Explain your reasons for choosing this bond to remove. Your expectations of how these asset-backed securities will perform in a rising interest rate environment and why.
Specifically relate this to the maturity effect, coupon effect, and/or duration of the chosen security Specifically relate this to the maturity effect, coupon effect, and/or duration of the chosen security

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