Consider the Lehman proposal for securitizing the receivables for American Express.

Assume that the master trust was formed today at 10:00 am. Per plan, the trust holds $ 2.5 billion in receivables. Class A debt proceeds were $ 1 billion (ignore fees). Class B debt proceeds were $ 35 million (ignore fees). Yield component was set at 3%. At 10:01 am, the Master Trust is fully functional. The receivables are not converted into cash as of yet. At this instant how much cash should be on hand with the trust (per plan)? This is a broad question. Your answer within + or - 1 million dollars is acceptable.

$___________