1. STL has asked you for advice on putting together the details of the new debt issues it is planning to make. What information would you need to obtain to provide this advice?
2. Assume now that you have uncovered the following facts about the types of projects STL takes:
- The projects are primarily infrastructure projects, requiring large initial investments and long gestation periods.
- Most of the new projects will be in emerging markets, and the cash flows are expected to be in the local currencies, when they do occur.
- The magnitude of the cash flows will largely depend on how quickly the economies of the emerging markets grow in the long run.
How would you use this information in the design of debt?