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.


• 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.