Derivatives

HSBC can provide the following Interest Rate Swap services (including VND):

Hedge against interest rate risk or change the risk profile to suit customers' view.
Change floating rates to fixed rates (without changing the terms of the existing loans) to avoid risks of rising interest rates (floating rate borrower).
Change from fixed to floating with a view that interest rates will rise in case of fixed rate depositors.
Settlement payments calculated by netting the two interest rates on the settlement date (multiplied by the notional principal). If the floating rate is above the fixed rate, HSBC will pay the customers the difference (floating rate - fixed rate) in case customers are borrowing floating rate loans and swapping from fixed rates to floating rates.
If the floating rate is below the fixed rate, the customers will pay HSBC the difference (fixed rate - floating rate).
No principal is exchanged, no up-front payments and premium are made.
One side of the swap pays a fixed rate of interest to the counterparty for receiving a floating rate.
Interest rate options available for USD swaps.

Benefits

• Protects against adverse movements in interest rates.
• Protects borrowing costs or investment yields.
• No premium is paid to enter into a swap.
• Offers versatility as it is totally independent from the actual borrowing or investment.
• No principal amount changes hands.