ln(5)=135000//8.314 *(1/436-1/T) T=455.69 K Solution ln(5)=135000//8.314 *(1/436-1/T) T=455.69 K.

1. A) There are several factors taken into consideration before giving credit rating to a particular
country. As for Tanzania, the country, it is a growing African country with high scope for
development. Keeping in consideration the attitude of the government and institutional
effectiveness, the country is bound to get a credit rating of BBB.
B) The primary reason Tanzania is approaching credit rating agencies is to raise capital for its
long term key infrastructure projects. The country has shown tremendous potential for growth in
future. It alsorecently moved from lower income to middle income group due to sustained
economic growth. This has also resulted in reduction of poverty rate and an upswing in people's
income. The growth rate was calculated to be 7% in 2014, along with per capita income of 1038
US dollars. Theinfrastructure is also growing at a rapid pace due to which the rating is justifiable.
C)The dollar denominated bond that Tanzania issued was worth 500 million US dollars. The
bond was stipulated to have an average maturity of five years and an amortising structure. The
amortisation of principal will happen in nine installments (semi-annually).
D) The dollar denominated bond that was issued by Tanzania raised a lot of speculations in the
investor's mind regarding the price of the issue. It remains to be seen whether the same
speculation will continue during the Eurobond issue. Tanzania is going to use the proceeds of the
issue in infrastructure projects. Given the growth rate that Tanzania has shown, the coupon is
expected to be higher in 2018.
Solution
A) There are several factors taken into consideration before giving credit rating to a particular
country. As for Tanzania, the country, it is a growing African country with high scope for
development. Keeping in consideration the attitude of the government and institutional
effectiveness, the country is bound to get a credit rating of BBB.
B) The primary reason Tanzania is approaching credit rating agencies is to raise capital for its
long term key infrastructure projects. The country has shown tremendous potential for growth in
future. It alsorecently moved from lower income to middle income group due to sustained
economic growth. This has also resulted in reduction of poverty rate and an upswing in people's
income. The growth rate was calculated to be 7% in 2014, along with per capita income of 1038
US dollars. Theinfrastructure is also growing at a rapid pace due to which the rating is justifiable.
C)The dollar denominated bond that Tanzania issued was worth 500 million US dollars. The
bond was stipulated to have an average maturity of five years and an amortising structure. The
amortisation of principal will happen in nine installments (semi-annually).
D) The dollar denominated bond that was issued by Tanzania raised a lot of speculations in the

2. investor's mind regarding the price of the issue. It remains to be seen whether the same
speculation will continue during the Eurobond issue. Tanzania is going to use the proceeds of the
issue in infrastructure projects. Given the growth rate that Tanzania has shown, the coupon is
expected to be higher in 2018.