Derivatives

HSCB requires a premium payment for its flexibility if the currency amount is uncertain. Minimum deal size is US$200,000 or currency equivalent. There is no maximum deal size. The period is up to 12 months. A premium or upfront fee must be paid within two days of the agreement and no foreign exchange credit line is required for the standard currency option. Zero premium is also available.

Benefits

• Gives companies flexibile and tailored solution to manage their foreign currency exposure.
• Protects against adverse foreign exchange movements while providing the ability to gain from favorable foreign exchange movements.
• Improved budgeting and cash flow planning.
• Flexible terms.
• Available in all major currencies.

HSBC can provide the following Cross Currency Swap services (including VND):

• Normal tenor is up to 5 years. Longer tenor is subject to SBV approval.


• Exchange of principal at maturity.
  
• The spot exchange rate at the time of doing the deal determines the principal amounts.


• Interest payments are determined at inception.


• Highly credit intensive.


• You are fully hedged against foreign exchange risks in terms of both principal and coupons.


• The obtainment of capital in the required currency, in the necessary volume and with the required due term.

Benefits

• Cheaper than cash markets by issuing foreign currency bonds directly.
• Can select to exchange principal at the start if desired.
• Simple documentation procedure compared to cash markets through issuing a bond or arranging a loan.
• Customised and can be reversed at any time.
• Off Balance Sheet.

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.


• Change from fixed to floating with a view that interest rates will rise.


• 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 you the difference (floating rate - fixed rate).


• If the floating rate is below the fixed rate, the CLIENT 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 (Vanillia & Exotics).

Benefits

• Protects against adverse movements in interest rates.
• Protects borrowing costs or investment yields, in sterling or foreign currency.
• 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.