Case | HBS Case Collection | July 1991 (Revised August 1991)

Philip Morris Companies, Inc. (B)

by Samuel L. Hayes III

Abstract

Looks at the company's plans for a new debt offering under the Rule 415 shelf underwriting provision--in this instance from the vantage point of the lead investment banker for the deal. The decision-maker must assess the risks of the issuer, the tone of the market, the price and commission to be set, and other details relating to the offering, including whether to use a syndicate, and whether to hedge. Gives students the opportunity to analyze the operating and financial data relating to a leading U.S. company in the context of a new debt offering. Students assume the role of the investment banker and can contrast the preoccupations of the vendor with those of the issuer.

Keywords: Risk Management; Stocks; Initial Public Offering; Consumer Products Industry; United States;

Citation:

Hayes, Samuel L., III. "Philip Morris Companies, Inc. (B)." Harvard Business School Case 292-006, July 1991. (Revised August 1991.)