Currency: USD, JPY, EUR, VND
Cross currency swap is a derivative agreement between Shinhan Bank and a customer to exchange principal and interest in one currency for the principal and interest in another currency.
Interest rate: Predetermined in the agreement
Maturity date: As agreement between two parties but not exceed principal loan maturity date
Exchange types: Floating => Floating, Fixed => Fixed, Floating => Fixed, Fixed => Floating
Swap types: Principal, Interest, Principal and Interest
Exchange rate: Predetermined at agreement date and applied for the whole CCS term
Interest rates are referenced with different indexes applied in the currency markets (Libor, Sibor, Euribor...).
Hedge against interest rate risk and exchange rate risk, especially for mid-long term loan
Reduce borrowing costs or opportunity costs given relatively accurate forecast of market trend
Restructure cash flows and balance sheet
Exploit the comparative advantage in raising funds in one currency to save other currencies
Switch loans from a particular currency to another currency