Company ABC borrows term loan 250 million from Bank term 2ye

Company ABC borrows (term loan) $250 million from Bank:

                  term: 2-year maturity

                  payment frequency: quarterly

                  start date: June 1 2018

                  interest rate: 3-month LIBOR + 1¼%

                  amortization schedule: 75% after year 1

Data for 3-month LIBOR%

                  June 1 2018        1.75                          June 1 2019        2.5

                  July 1 2018          1.9                             July 1 2019          2.45

                  August 1 2018   1.98                          August 1 2019   2.48

                  Sept 1 2018         2.05                          Sept 1 2019         2.5

                  Oct 1 2018           2.10                          Oct 1 2019           2.60

                  Nov 1 2018          2.10                          Nov 1 2019          2.65

                  Dec 1 2018          2.22                          Dec 1 2019          2.72

                  Jan 1 2019           2.20                          Jan 1 2020           2.80

                  Feb 1 2019           2.10                          Feb 1 2040           2.99

                  March 1 2019    2.18                          March 1 2020    2.81

                  April 1 2019        2.25                          April 1 2020        3.05

                  May 1 2019         2.35                          May 1 2020         3.3

What are the payments, and when, ABC makes to Bank?

Solution

Quarter Particulars Loan Aamount (Principal) 3-Month Libor Rate Interest rate applicable (LIBOR+1.25%) Amount Payable Comments 1-Jun-18 to 31-Aug-18 Interest Payment 250000000 1.75% 3.00% 1875000 1-Sep-18 to 30-Nov-18 Interest Payment 250000000 2.05% 3.30% 2062500 1-Dec-18 to 28-Feb-19 Interest Payment 250000000 2.22% 3.47% 2168750 1-Mar-19 to 31-May-19 Interest Payment 250000000 2.18% 3.43% 2143750 31-May-19 Principal Payment as part of Amortization Schedule NA NA NA 187500000 75% of loan Principal paid back. 1-Jun-18 to 31-Aug-18 Interest Payment 62500000 2.50% 3.75% 585937.5 1-Sep-18 to 30-Nov-18 Interest Payment 62500000 2.50% 3.75% 585937.5 1-Dec-18 to 28-Feb-19 Interest Payment 62500000 2.72% 3.97% 620312.5 1-Mar-19 to 31-May-19 Interest Payment 62500000 2.81% 4.06% 634375