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Class 11 Rhodes, Greece
Brian David Butler Professor of international finance and global entrepreneurship with Forum-Nexus Study Abroad.  Guest lecturer with the  IQS Business School  of the Ramon Llull University in Barcelona, and the  Catholic University of Milan .  Previously, Brian taught finance, economics and global trade courses at  Thunderbird’s Global MBA  program in Miami, and worked as a research analyst with the  Columbia Business School  in New York City. Brian currently lives in Recife, Brazil where he is teaching classes at the university  Faculdade Boa Viagem . A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled extensively in Latin America, Asia, Europe and North America.  [email_address] LinkedIn/briandbutler Skype: briandbutler
Brian Butler is a specialist in international economic analysis, and is founder of the prestigious “GloboTrends“ ( www.globotrends.com ) online economics site, which has been featured as syndicated content on Nouriel Roubini’s RGE Monitor, Emerginvest.com, Business Week Exchange, Wikinvest.com, and other leading news outlets.  http:// globotrends.pbworks.com /  ,  http:// blog.globotrends.com /
Find my slides: ,[object Object]
Lecture Schedule* * Does not include professional visits,  *Subject to change, modification without warning
Team Project ,[object Object],[object Object],[object Object],[object Object]
Athens Greece Greece – at the heart of a European Crisis?
[object Object],[object Object]
Cheap borrowing came to an end ,[object Object],[object Object]
Exam question (and in paper!) ,[object Object],[object Object]
Question ,[object Object]
Background: ,[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object]
Understanding Greek challenges ,[object Object],[object Object],[object Object],[object Object]
1. Current account deficits ,[object Object],[object Object],[object Object]
2. Budget deficits ,[object Object],[object Object],[object Object],[object Object]
Problem with democracy (need for IMF as “bad guy”) ,[object Object],[object Object],[object Object]
Is the Euro to blame for Greece’s problems? ,[object Object],[object Object]
Don’t blame the Euro  (for the Greek mess) ,[object Object],[object Object],Robert J. Samuelson ,  Monday, May 10, 2010  http://www.washingtonpost.com/wp-dyn/content/article/2010/05/09/AR2010050902443.html?hpid=opinionsbox1
Why is “short term” finance a problem / risk for a country like Greece / Spain? http://thegovmonitor.com/world_news/united_states/greece-italy-and-europes-sovereign-debt-crisis-28846.html
Greek short term debt trouble ,[object Object],http://thegovmonitor.com/world_news/united_states/greece-italy-and-europes-sovereign-debt-crisis-28846.html
International financial markets Intro to Eurocurrencies, eurobonds, more…
“ international money market” ,[object Object],[object Object],Grosse/Kujawa – International Business, 3 rd  edition
“ international money market” ,[object Object],[object Object],[object Object],[object Object],Grosse/Kujawa – International Business, 3 rd  edition
Definitions ,[object Object],[object Object],[object Object],[object Object],[object Object],Ross/Westerfield/Jaffe - McGraw-Hill 7 th  edition – Corporate Finance Ch 31
Definitions ,[object Object],[object Object],Ross/Westerfield/Jaffe - McGraw-Hill 7 th  edition – Corporate Finance Ch 31
Definitions ,[object Object],[object Object],[object Object],[object Object],[object Object],Ross/Westerfield/Jaffe - McGraw-Hill 7 th  edition – Corporate Finance Ch 31
Short & Medium-term Financing ,[object Object],[object Object],[object Object],[object Object],Ross/Westerfield/Jaffe - McGraw-Hill 7 th  edition – Corporate Finance Ch 31
Eurocurrency loans ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Ross/Westerfield/Jaffe - McGraw-Hill 7 th  edition – Corporate Finance Ch 31
International Bond Markets ,[object Object],[object Object],[object Object],Ross/Westerfield/Jaffe - McGraw-Hill 7 th  edition – Corporate Finance Ch 31
Foreign Bonds ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Ross/Westerfield/Jaffe - McGraw-Hill 7 th  edition – Corporate Finance Ch 31
Eurobonds ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Ross/Westerfield/Jaffe - McGraw-Hill 7 th  edition – Corporate Finance Ch 31
Facebook case study International financial markets
Facebook Case study - homework ,[object Object],[object Object],[object Object]
Facebook Case study - Assigned Readings ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Facebook case study ,[object Object],[object Object],[object Object],[object Object]
Facebook case study ,[object Object],[object Object],[object Object]
 
# = All interest costs are presented as annual percentage rates.  The rates would have to be renegotiated annually each year during the project if bank loans were used.  Facebook could expect to pay a spread of one percent per year over LIBOR or 1/8% over prime, plus the fees that are one-time, up-front payments on the financing, based on the principal value of the loan.  To simplify the analysis, assume that the interest payments take place at the end of the period, if you wish.    †  = bonds are issued at fixed interest rate for two years.  A Eurobond issued at a floating interest rate is called a Floating Rate Note (FRN).   k* = Facebook's weighted average cost of capital.
Facebook case study ,[object Object],[object Object],[object Object],[object Object],[object Object]
 
 
Questions ,[object Object],[object Object],[object Object]
Loan vs. Bond ,[object Object],[object Object]
Loan vs. Bond ,[object Object]
Questions ,[object Object],[object Object],[object Object]
Facebook case study ,[object Object],[object Object],[object Object],[object Object],[object Object]
Facebook case study ,[object Object],[object Object]
Facebook case study ,[object Object]
Facebook case study ,[object Object],[object Object],[object Object]
Facebook case study ,[object Object],[object Object]
Facebook case study ,[object Object],[object Object],[object Object],[object Object]
FX risk ,[object Object]
FX risk ,[object Object],[object Object],[object Object]
Job of corporate treasurer ,[object Object],[object Object],[object Object]
FX risk ,[object Object]
Exam Material ,[object Object]

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Part 11 rhodes finance class summer 2010 forum nexus

  • 2. Brian David Butler Professor of international finance and global entrepreneurship with Forum-Nexus Study Abroad. Guest lecturer with the IQS Business School of the Ramon Llull University in Barcelona, and the Catholic University of Milan . Previously, Brian taught finance, economics and global trade courses at Thunderbird’s Global MBA program in Miami, and worked as a research analyst with the Columbia Business School in New York City. Brian currently lives in Recife, Brazil where he is teaching classes at the university Faculdade Boa Viagem . A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled extensively in Latin America, Asia, Europe and North America. [email_address] LinkedIn/briandbutler Skype: briandbutler
  • 3. Brian Butler is a specialist in international economic analysis, and is founder of the prestigious “GloboTrends“ ( www.globotrends.com ) online economics site, which has been featured as syndicated content on Nouriel Roubini’s RGE Monitor, Emerginvest.com, Business Week Exchange, Wikinvest.com, and other leading news outlets. http:// globotrends.pbworks.com / , http:// blog.globotrends.com /
  • 4.
  • 5. Lecture Schedule* * Does not include professional visits, *Subject to change, modification without warning
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  • 7. Athens Greece Greece – at the heart of a European Crisis?
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  • 20. Why is “short term” finance a problem / risk for a country like Greece / Spain? http://thegovmonitor.com/world_news/united_states/greece-italy-and-europes-sovereign-debt-crisis-28846.html
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  • 22. International financial markets Intro to Eurocurrencies, eurobonds, more…
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  • 33. Facebook case study International financial markets
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  • 39. # = All interest costs are presented as annual percentage rates. The rates would have to be renegotiated annually each year during the project if bank loans were used. Facebook could expect to pay a spread of one percent per year over LIBOR or 1/8% over prime, plus the fees that are one-time, up-front payments on the financing, based on the principal value of the loan. To simplify the analysis, assume that the interest payments take place at the end of the period, if you wish.   † = bonds are issued at fixed interest rate for two years. A Eurobond issued at a floating interest rate is called a Floating Rate Note (FRN).   k* = Facebook's weighted average cost of capital.
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Editor's Notes

  1. See chapter 7 – grosse – assign reading.
  2. See chapter 7 – grosse – assign reading.
  3. Quiz: What is difference between Eurobond and Foreign Bond?
  4. Quiz: What is difference between Eurobond and Foreign Bond?