This Case is about Finance

Publication Date: 06/08/1999

The CFO of UniHost Corporation is confronted with a condition to raise capital. UniHost required capital fund multiple growth opportunities and to refund a $52 million bridge loan facility. Funding options contained convertible bonds, equity and high yield debt. The CFO had to determine on the type and arrangement of the lending. The case allows for discussion of several problems, including: the public funding procedure in Canada, funding strategy (i.e. selection of the type of funding in the context of a likely sequence of financings), optimum capital structure, and the impact of funding decisions on the entire strategy of a company. With respect to the debt options, data is supplied which allows for evaluation of the choice of bond rating services, bond covenants and debt maturity.

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