Currency swap

[TheFashionforward5]

this was really bad. You didn't even give an example or reason why companies would do this.

[bionicturtledotcom]

@TheFashionforward5 thanks, the substance of your point is valid well-taken but your attitude is not useful

[TheGautamj]

Thanks so much! Really appreciate it, David!

[MrBigEnchilada]

subscribe!!!!

[svtuition]

Great lecture

[Woutchitsou]

My question was complicated for no reason...i will make it way simpler. What are the motives to be doing a currency swap ?

[raala12]

@Woutchitsou Say company A which is a US based company doing business in Europe. Company B which is a europe based company doing business in US. Company A can raise funds easily in USD as they are US based ,but they need euro s they are doing business in Euro. Company B can easily raise money in euro as they are Europe based but they need USD as they are doing business in US. So this is the product suits them.

[lcvd1]

@raala12 It seems illegal!

[Woutchitsou]

I am totaly new to finance, im a law student taking a business financing class and i have a question. If i understand well, the currency swap is simply an interest swap that can be done under another currency so companies can potentially profit from interest rate variation in other countries ? The only advantage of this is to make it possible for interest rate swaps to become international ? Is that it ? And if it is, is it really worth it there must be a fat fee for principal exchange no ?

[lukegranger89]

@Woutchitsou yeah law students are usually dumbasses when it comes to anything remotely technical scientific or mathematical since it involves logic and not bullshit

[RANIASLD]

Excellent and Thanks a lot.

Do you have any more videos on different topics?

I would be certainly interested to learn and benefit.

Thanks again,

Rani

[ChallengeDK]

What's the motivation to swap principal at beginning/end?

[Zapanath]

@ChallengeDK ...because they are two different currencies. they would be subject to different interest rates and price fluctuations against each other. its a bet of one against the other.

[ronbag123]

@ChallengeDK thats a good question. Consider this example:-

A US company(A) wants to start its operations in UK and a UK company (B) wants to open up in US.

Both companies need loans denominated in the currency of the foreign country. So A needs 1mil in UK pounds and B needs $1 mil. Since it would cost them more to borrow in the foreign country(because they are new to the business), it makes sense for these 2 companies to borrow money in their own country and swap it with each other !!

[batigoltuan]

@ChallengeDK

Say: When a corp want to issue foreign currency bond domestically but its not legal in its country. The corp then, can issue domestic currency bond, then swap into foreign currency.

Effectively, the corp has all characteristics of a foreign currency bond issuance.

[afr0dude08]

how do you actually value these swaps?

is there another video with an example on this? it would be really helpful if you can show, how if using swap method, how both parties pay less than using the cross currency swap, and if less how much less, and show how this is done rather than just explaining it can be done.

[sandmothtube]

What did he say ???, LOL

[michaeldcampion]

"ladies and gentlemen, the greatest man on Youtube"

Totally concur bro! Love le turtle....

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[CryBaby211]

Thank you so much

[pantherenebuleuse]

ladies and gentlemen, the greatest man on Youtube