Product Name

Cross Currency Swap

Product Descriptions

A cross currency swap (“CCS”) refers to an agreement between customer and the bank to exchange interest payments and principal on debt or asset denominated in two different currencies. Generally, the interest rate on one leg is floating 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.

Product Features

A Cross currency swap (“CCS”) allows customers to convert debt for the purpose of lowering debt cost, and hedge against both Foreign Exchange risk and Interest Rate risk.

Target Customers

CCS is suitable for corporate clients with mismatched financing currencies who need to hedge interest rate risk.

Process

1.Agreement signing: Before conducting the transaction of Cross Currency Swap with Bank of China, clients need to sign the ISDA agreement and Derivatives Transaction Request Form.

2.Deposit implementation: clients are required to provide a certain amount of margin deposit or have the corresponding credit limit deducted by our bank.

3.Transaction application: Clients provide the CCS transaction details in the form of written application.

4.Completion of transaction: Once the transaction is confirmed, Bank of China shall provide transaction confirmation to clients in written form.

5.Settlement: After the transaction, both the customer and the bank will settle based on the transaction confirmation, and exchange interest payment (floating/ fixed) in specified currencies on every pre-determined exchange date.