Swap
Through swap agreements we give customers a chance to effectively manage their cashflows and risks by minimizing their borrowing costs.
- Currency Swaps
- Interest Rates Swaps
- Cross Rate Swaps
Currency Swap
- A currency swap is a contract in which the parties agree that cash flows denominated in two different currencies will be exchanged (“swapped”) at a stipulated date or for a stipulated period of time at the exchange rate currently then in effect.
- Currency swaps bear no exchange rate risk but are exposed to interest rate risk.
- Currency swaps are typically used to reduce borrowing costs and/or to normalize cash flows without incurring exchange rate risk.
Interest Rate Swap
- An interest rate swap is a contract in which the parties agree to exchange the interest cash flows on debts denominated in the same currency by converting a fixed to a variable rate or vice-versa. Interest rate swaps provide an effective way of managing interest rate risk.
- In an interest rate swap there is no exchange of principal: only the interest cash flows generated on them are exchanged.
Cross Currency Swap
- "A cross currency swap is a contract that combines the features of both an interest rate and a currency swap.