As we discussed earlier, we are considering constructing a new $130 million 320-suite tower on our Venetian property. We have a variety of financing options at our disposal. Please compute the current cost of using each of these financing options. ?
- We have $940 million in bonds issued in 2006 and maturing in 2015. These bonds pay a 6.375% coupon paid semiannually. They currently trade for $104.50 per $100 face value. ?
- Our new $3.3 billion Macau short-term 30-day credit facility charging 6.5% per year.
- A potential $71 million line of credit. We’ve been quoted 4% interest accrued annually, but the line comes with a 15% compensating balance.
- Alternately, potentially up to $100 million in 3-month commercial paper notes. Our advisors indicate that they would most likely sell with a 3.4% discount yield on each $1,000 note.
- $114 billion in invoices, most of which are under the terms 2/15 net 60.
- Our common stock current trades at $56.04 per share with a forward P/E of 16.5. ?
- A potential placement of preferred stock. Our advisors claim they would be able to place $600 million in shares with $39 million in annual dividend payments.