4500.11 - Swaps - 57 - Floating-Fixed Swaps Illustration of...

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Swaps -57- Floating-Fixed Swaps Fixed Illustration of a Floating/Fixed Swap Party Underwriter Counterparty Variable Fixed Variable -58- If net is positive, underwriter pays party. If net is negative, party pays underwriter.
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Floating to Floating Swaps LIBOR Illustration of a Floating/Floating Swap Party Underwriter Counterparty T-Bill LIBOR T-Bill -59- If net is positive, underwriter pays party. If net is negative, party pays underwriter. Parallel Loan Illustration of a parallel loan United States Germany Loan guarantees Debt service in $ German Parent US bidi U.S. Parent German Principal in $ Debt service in Euro Principal in Euro -60- U.S. subsidiary of German Firm German subsidiary of U.S. Firm
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Currency Swap Illustration of a straight currency swap German rate x €1,000,000 € 1,000,000 2 2 U.S. rate x $1,250,000 German rate x €1,000,000 U.S. rate x $1,250,000 1 1 € 1,000,000 $1,250,000 $1,250,000 € 1,000,000 € 1,000,000 Borrow in US, invest in Europe Borrow in Europe,
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4500.11 - Swaps - 57 - Floating-Fixed Swaps Illustration of...

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