EFTA00826068.pdf

From: "Jeffrey E." <[email protected]> To: Shahzad Shahbaz < >, "Jabor Y." Subject: Date: Mon, 06 Jun 2016 17:18:34 +0000 - Credit lines at many banks floor the floating index at 0%. With 1-month Euribor fixing at -0.25%, the benefit of negative interest rates can be used to your advantage. - You can bypass the floor by borrowing in USD at 1-month Libor (plus a spread) and using a cross-currency swap to create a synthetic EUR loan. The cross currency basis swap pays USD Libor and you pay -0.35% (so 35bps actually get paid to you as it is negative). This allows you to not only capture the benefit of negative rates but also cheapen the funding bythe cross-currency differential in the market. theerfore - By creating a synthetic EUR loan via cross-currency swaps, you can reduce funding costs of Sheik Hamad by roughly 60 bps for 2 years (combination of savings from negative Euribor rates and negative cross- currency basis). please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation®gmail.com, and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA00826068