Product Overview

A CNY interest rate swap is a transaction in which a client and Bank of China agree to periodically exchange interest payments based on different rate structures over a specified future period, calculated on an agreed notional principal amount. Through a CNY interest rate swap, a client can convert floating-rate RMB assets or liabilities to fixed-rate ones, or vice versa. Alternatively, to hedge the basis risk between two different floating rates, a client can convert RMB assets or liabilities linked to one floating rate to those linked to another, thereby managing RMB interest rate risk. The notional principal currency for this product is RMB.

Product Features

Clients can use CNY interest rate swaps to manage RMB interest rate risk, lock in borrowing costs, and potentially reduce financing costs or improve asset returns.

The final settlement for a CNY interest rate swap involves net payment of the difference based on the rates specified in the swap contract. This results in a lower settlement amount and simpler procedures compared to full principal delivery.

Applicable Clients

This product is suitable for clients needing to hedge interest rate risk, optimize asset-liability structures, and meet various risk management requirements.

Application Procedures

Agreement Signing: Clients must sign master agreements, such as the ISDA Master Agreement or the NAFMII Master Agreement, with BOC before executing a CNY interest rate swap.

Business Background Review: BOC reviews the transaction purpose, the clarity and completeness of transaction information, the compliance and authenticity of the client's seals, and the rationality of the client's needs. Verification of the underlying actual demand is not required for financial institution clients.

Credit Facility or Margin Settlement: A credit facility or corresponding margin settlement must be arranged through the client relationship department.

Price Inquiry: Clients request a price quote from BOC through qualified communication channels.

Execution: Upon executing the transaction, BOC sends transaction confirmation documents to the client.

Settlement: On each interest payment date, both parties settle the net interest difference according to the contract terms.

BOC Advantages

BOC has an experienced team specializing in trade execution and product design. With an efficient pricing mechanism and strong industry competitiveness, it is well-positioned to provide clients with high-quality product quotes.

Risk Disclosure

Before proceeding, carefully read the Risk Disclosure Statement to fully understand and accept the transaction terms and associated risks. Clients may face risks, including but not limited to policies, markets, and liquidity.