Currency Swaps. Swap Contracts entered into by Borrower or a Restricted Subsidiary with the purpose and effect of fixing the rate of exchange between two currencies with respect to the amount of the payments to be made or received by Borrower or a Restricted Subsidiary in one of such currencies pursuant to an agreement, provided that (1) the term does not extend past the Maturity Date, (2) no such contract (other than a Lender Swap Contract) requires Borrower to put up money, assets, or other security against the event of its nonperformance prior to actual default by Borrower in performing its obligations thereunder, (3) each such contract is with (i) a Lender or an Affiliate of a Lender or (ii) a counterparty who is unsecured who at the time the contract is entered into maintains a minimum debt rating of BBB or Baa2 as determined either by S&P Global Ratings or Xxxxx’x Investors Service, Inc. and (4) such Swap Contract is otherwise acceptable to Agent.
Currency Swaps. ▪ Currency Swaps are essentially forward contracts that can be tailored for specific needs. 3 Phases.
Currency Swaps. The simplest kind, a fixed-for-fixed currency swap, involves exchanging interest and principal payments in one currency for interest and principal payments in another currency. • Requires principal to be specified in each of the two currencies. Principal amounts are usually exchanged at the beginning and at the end of the swap • Usually the principal amounts are chosen to be equivalent using the exchange rate at the initiation of the swap (but can be quite different at the end of the life of the swap) • Illustration: – 5-year currency swap agreement between IBM and British Petroleum – IBM pays 5% interest in sterling and receives fixed rate of interest of 6% in dollars from BP – Interest payments made once per year and principal amounts are $18 million and £10 million. Dollars 6% British IBM Sterling 5% Petroleum – IBM pays $18 million and receives £10 million at the start of the swap – Each year, IBM receives $1.08 million and pays £0.50 million – At the end of the swap, it pays a principal of £10 million and receives principal of $18 million
Currency Swaps. Contracts entered into by Borrower with the purpose and effect of fixing the rate of exchange between two currencies with respect to the amount of the payments to be made or received by Borrower or a Subsidiary in one of such currencies pursuant to an agreement, provided that
Currency Swaps. Contracts entered into by Borrower with the purpose and effect of fixing the rate of exchange between two currencies with respect to the amount of the payments to be made or received by Borrower or a Subsidiary in one of such currencies pursuant to an agreement, provided that (1) the term does not extend past the Maturity Date, (2) no such contract (other than a Lender Swap Contract) requires Borrower to put up money, assets, or other security against the event of its nonperformance prior to actual default by Borrower in performing its obligations thereunder, and (3) each such contract is with (i) a Lender or an Affiliate of a Lender or (ii) an unsecured counterparty who at the time of the contract maintains a minimum debt rating of BBB or Baa2 as determined either by Standard & Poor’s Corporation or Xxxxx’x Investors Service, Inc. or is otherwise acceptable to Agent.
Currency Swaps. (a) Subject to paragraph (b), if an Early Termination Date is designated in respect of a Currency Swap:
Currency Swaps. Contracts entered into by Borrower with the purpose and effect of fixing the rate of exchange between two currencies with respect to the amount of the payments to be made or received by Borrower or a Subsidiary in one of such currencies pursuant to an agreement, provided that (1) the term does not extend past the Maturity Date, (2) no such contract (other than a Lender Swap Contract) requires Borrower to put up money, assets, or other security against the event of its nonperformance prior to actual default by Borrower in performing its obligations thereunder, and (3) each such contract is with (i) a Lender or an Affiliate of a Lender or (ii) a counterparty who is unsecured who at the time the contract is entered into maintains a minimum debt rating of BBB or Baa2 as determined either by Standard & Poor’s Corporation or Xxxxx’x Investors Service, Inc. or is otherwise acceptable to Agent.
