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Cross Currency Swap

Product Name

Cross Currency Swap (CCS)

Introduction

A cross-currency swap is an agreement between customer and BOC Macau to exchange interest payments and principal on debt or asset denominated in two different currencies. Generally, the interest rate on one leg is floating (eg. USD LIBOR) and the interest rate on another leg is fixed. The principal can be physically exchanged or not. The notional amount is determined by the prevailing FX spot rate and remains constant during the life of the swap.

Features

CCS offers customers the following opportunities:

1. To convert debt or asset for the purpose of lowering debt cost or enhancing asset return.

2. To hedge against both FX risk and interest rate fluctuation.

Eligible customers

CCS is an instrument used by

1. a customer who seeks to reduce its mid/long term debt cost;

2. a customer who has cash flows in one currency with which it normally conduct business and issues debt in another currency;

3. a customer who has cash flows in one currency with which it normally conduct business and invests in assets in another currency.

Service Time

Customers can go to Bank of China Macau Branch or any sub-branch in person during office hours.

Risk Disclosure

1. FX risk: If the FX market goes against the expectation, the agreed exchange rate could be worse than the SPOT rate at the end of each swap period;

2. Interest rate risk: If the interest rate goes against the expectation, the agreed interest rate could be worse than the prevailing interest rate in the market at the end of each swap period;

3. Early termination may incur additional cost.

Please call our hotline 888-95566 for more details.

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