Preview

case study

Powerful Essays
Open Document
Open Document
2517 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
case study
COUNTRY RISK ANALYSIS 2014-15
Republic of Solvencia and the International Capital Markets

SOLVENCIA’s Eurobond Request to CASINO Bank

www.developingfinance.org
Auteur(s) : Dr. Michel Henry BOUCHET, Distinguished Finance Professor, Global Finance
Center & North Sea Global Equity Management
Etablissement : SKEMA Business School

© SKEMA 2013- CCMP-2008 Country Risk Analysis : Solvencia & Casino Bank- Bouchet Michel-H, Global
Finance Center

SOLVENCIA

Country Risk Case Study

© CCMP-2008 Country Risk Analysis : Solvencia & Casino Bank- Bouchet Michel-H, CERAM Global Finance
Center

TABLE of Contents

1. Case Presentation and Introduction- Pedagogical support note 2. Country risk case study: Solvencia and Casino Bank
3. Excel spreadsheet
4. Annex: questions and answers regarding international bond issue and country risk
5. Case correction 1: Final Country Risk Report
6. Case Correction 2: Excel spreadsheets, ratio calculations, liquidity and solvency indicators, and graphs
7. Powerpoint-based case correction
8. Further readings and bibliography

© Skema 2013- CCMP – 2008- Solvencia : Country risk case study – Michel Henry Bouchet - Global
Finance Center

Republic of Solvencia and Global Capital Markets:

Eurobond Request to Casino Bank
Fall 2014

Introduction
It was 9 o’clock yesterday morning, when your secretary passed an important telex from
Solvencia’s Finance Minister, requesting an urgent meeting next week in Monaco. It was not too difficult for you to guess the purpose of the meeting given that it might well stem from the country’s plan to launch €500 million - €700 million Eurobond on international capital markets.
Mr. Solvent, the finance minister wants to get your assessment regarding market conditions for the bond floating, in order to compare with your competitors’ offers in London, Zurich and New York.
The US subprime crisis environment and its spill-over effect, and the protracted credit crunch,
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    FINS 3650 Topic 9 PJ V6
    • 1249 Words
    • 16 Pages

    FINS 3650 Topic 9 PJ V6

    2 1 Course schedule 1. Course overview and introduction 7 & 8. Market risk and liquidity 2. Country risk 9. Economic capital & risk-adjusted return 3.…

    • 1249 Words
    • 16 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    201 task c-understanding employment
    • 1837 Words
    • 7 Pages

    201 task c-understanding employment

    If the matter is not resolved at such a meeting, a further meeting will be…

    • 1837 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Good Essays

    big time
    • 367 Words
    • 2 Pages

    big time

    Did Euroland take risk into account in its capital budgeting? If so, how? Which project is the riskiest, and why? There are several reasons why the riskiest project is riskiest; name three reasons.…

    • 367 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    Banco Multiva Case
    • 1175 Words
    • 5 Pages

    Banco Multiva Case

    S&P affirmed Banco Multiva’s credit ratings on a national long-term scale of ‘MxA’ and short-term of ‘MxA-2’. The outlook is stable. At the same time, the credit agency affirmed their long-term rating on national scale ratings of ‘mxBBB-‘ of its issuance of subordinated debentures, and a rating of ‘mxA’ of stock certificates offered by the bank. The qualified ‘mxA’ debt is more susceptible to adverse effects of changes in circumstances or economic conditions that skilled at senior debt. However, the payment capacity of the obligor to meet its financial commitment on long-term obligations is strong in relation to other issuers in the domestic market. The short-term debt rated at ‘mxA-2’ is slightly more susceptible to adverse changes in circumstances…

    • 1175 Words
    • 5 Pages
    Good Essays
    Read More
  • Powerful Essays

    Billabong International Ltd
    • 1472 Words
    • 6 Pages

    Billabong International Ltd

    Billabongs’ activities are exposed to a variety of financial risks, these include; market risk (including foreign exchange risk and cash flowinterest rate risk), credit risk and liquidity risk. To minimize potential adverse effects on the financial performance of Billabong, the overall risk management program focuses on theunpredictability of financial markets (Billabong Annual Report, 2011).…

    • 1472 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    BU130 Working and learning: developing effective performance at work
    • 4031 Words
    • 14 Pages

    BU130 Working and learning: developing effective performance at work

    When - The meeting took place on 31st January 2014 at 12:00pm noon and lasted until approximately 13.00pm.…

    • 4031 Words
    • 14 Pages
    Good Essays
    Read More
  • Good Essays

    The Toys “R” Us Lbo Case
    • 1573 Words
    • 7 Pages

    The Toys “R” Us Lbo Case

    Both equity holder and debt holder bear a high risk. For equity holders, in addition to the operational risk assumed risk arises due to significant financial leverage. Interest costs resulting from substantial amounts of debt are…

    • 1573 Words
    • 7 Pages
    Good Essays
    Read More
  • Powerful Essays

    Capital vs Liquidity
    • 2695 Words
    • 11 Pages

    Capital vs Liquidity

    The evolution of banking has seen their balance sheet composition change. The model changed from one of borrowing at low rates and lending high rates with little interest rate or liquidity risk to one where borrowing in the short end and lending in longer maturities. This change created both interest rate risk and liquidity risk.…

    • 2695 Words
    • 11 Pages
    Powerful Essays
    Read More
  • Best Essays

    As Assessment of Financial Management in International Business
    • 2686 Words
    • 11 Pages

    As Assessment of Financial Management in International Business

    Different currencies, tax regimes, regulation concerning cash flow through the countries, norms regarding financial activities, economical and political risks can complicate financial decisions and money management. Financial managers must keep in mind all these factors when deciding which activities to finance, what is the best way to finance them and how to protect company from future political and economical risks including foreign exchange risks.…

    • 2686 Words
    • 11 Pages
    Best Essays
    Read More
  • Powerful Essays

    Infrastructure Finance in Developing Countries: The Potential of Sub Sovereign Bonds
    • 18800 Words
    • 76 Pages

    Infrastructure Finance in Developing Countries: The Potential of Sub Sovereign Bonds

    Introduction................................................................................................................................. The case for sub-sovereign bonds .................................................................................................. Global perspective on the current market for sub-sovereign bonds ............................................... Supply-side factors in sub-sovereign bond issuances in developing countries ................................ Demand-side factors in sub-sovereign bond issuances in developing…

    • 18800 Words
    • 76 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Comparative Analysis of the Banking Systems in the United States and Germany
    • 2887 Words
    • 12 Pages

    Comparative Analysis of the Banking Systems in the United States and Germany

    Hera, R. (2012, November 20). Finansovie prestupleniya - eto sistemni risk dlya SSHA. In Goldenfront. Retrieved January 19, 2013, from http://www.goldenfront.ru/articles/view/ron-hira-finansovye-prestupleniya-eto-sistemyj-risk-dlya-ssha.…

    • 2887 Words
    • 12 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    International Bond Markets
    • 2395 Words
    • 10 Pages

    International Bond Markets

    1. Describe the differences between foreign bonds and Eurobonds. Also discuss why Eurobonds make up the lion’s share of the international bond market.…

    • 2395 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Debt Crisis in Europe
    • 5415 Words
    • 22 Pages

    Debt Crisis in Europe

    OECD (2012), OECD Journal: Financial Market Trends, Volume 2011 Issue 2, OECD Publishing. Retrieved from: http://dx.doi.org/10.1787/fmt-v2011-2-en…

    • 5415 Words
    • 22 Pages
    Powerful Essays
    Read More
  • Better Essays

    SWOT Analysis of Hock Seng Lee
    • 1047 Words
    • 5 Pages

    SWOT Analysis of Hock Seng Lee

    Tran, M., 2012. Eurozone debt crisis poses serious threat to emerging markets, theguardian, [online]. Available at: http://www.guardian.co.uk/global-development/2012/jun/19/eurozone-debt-crisis-emerging-markets [Accessed 22 October 2012]…

    • 1047 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    Kaplan And Mikes Case Study
    • 1422 Words
    • 6 Pages

    Kaplan And Mikes Case Study

    In the early 1990’s Iceland held €156m in foreign securities which jumped to a staggering €18bn by 2007 on the back of rapid expansion in their banking sector, creating a significant currency risk (Kevin McConnell 2015 lecture). They relied heavily on banking and it’s growth was funded in euro despite Krona being the national currency – their central bank operated in one currency while their funding profile was in another. The problem was compounded by their over-reliance on wholesale funding markets which dried up from 2007 and as they were outside the EU, they did not benefit from their protection mechanisms. The Kaplan and Mikes framework provides a number of approaches to manage strategy risk which could be used here including independent experts to bring some perspective on the risks the Icelandic banks were taking or embedded experts to challenge the volatile nature of their balance sheet and continuously monitor and influence the banks risk profile. Had measures such as these been more effective, perhaps the warning signs would not have been ignored. It would appear however that once again, reward and incentive models were not aligned to prudent risk management, instead “managers of these banks were tempted by the higher interest rates they could charge on the more risky lending, producing large, short term (apparent) profits and therefore larger bonuses” (Arnold, chapter 26). Had the banks sought to understand the inherent risks in their strategy, perhaps they could have averted their ultimate…

    • 1422 Words
    • 6 Pages
    Good Essays
    Read More

Related Topics