During fiscal 2004, Georgia-Pacific Company called the following bond issuances:
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$243 million
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9.875% bonds
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due November 1, 2021
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$250 million
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9.625% bonds
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due March 15, 2022
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$250 million
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9.500% bonds
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due May 15, 2022
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$240 million
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9.125% bonds
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due July 1, 2022
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$250 million
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8.250% bonds
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due March 1, 2023
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$250 million
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8.125% bonds
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due June 15, 2023
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In groups of three or four:
1. Identify the face value, coupon rate, and maturity of each of the bond issues.
2. Discuss some of the potential reasons that Georgia-Pacific may have had for deciding to call these bond issues early.
Moody's Investors Service maintains a Web site at https://www.Moodys.com. One of the services offered at this site is a listing of announcements of recent bond rating changes. Visit this site and read over some of these announcements. Write down several of the reasons provided for rating downgrades and upgrades. If you were a bond investor or bond issuer, would you care if Moody's changed the rating on your bonds? Why or why not?