• The Cross Currency Swap (CCS) allows you to transpose a debt denominated in one currency into a debt denominated in another currency.
• Your company is financed in EUR from its local bank and makes a foreign currency loan to its subsidiary based outside the Eurozone (example: USD).
• The notional total amount of financing as well as the amortization schedule are converted at the spot rate. The conversion rate for future capital repayments is set (at the level of the spot rate).
• Under the CCS, at each interest term, you receive the EUR rate paid for EUR financing, and pay the USD Libor (or fixed rate).
• At the end of the contract, the client receives the remaining notional total EUR/USD to repay the local bank.

• The Cross Currency Swap is aimed at companies wishing to take out loans in foreign currencies and who benefit from the best financial conditions in their local currency.

• Your business is covered against the exchange risks for capital and interest paid throughout the strategy.
• The interest paid in a foreign currency can be set at a fixed rate.
• No implementation costs.

• Your company does not profit from a possible improvement in the exchange market.
• Your company does not profit from a low interest rate in the case of fixing the rate paid.

• The company establishes financing of €6M, starting September 15, 2026 over 10 years, at the rate of 3-month Euribor floored at 0% + 0.75%, with constant quarterly amortization of principal (€150k / quarter).

• At the time the CCS is put in place, two parameters are fixed:

• An EUR/GBP conversion rate (corresponding to the market price at the time of implementation: 0.85 in our example). This will be used throughout the transaction to convert principal amounts (or amortization) from EUR to GBP amounts;

• The fixed rate in GBP: 2.18% in our example;

• The cash flows exchanged under the CCS are as follows:

• Initial principal: the company will pay the bank the €6M raised under the financing and receive the equivalent in GBP (£5.1M), an amount it will use to settle its acquisition.

• Amortizations: each quarter, the company will receive amortizations in EUR (€150k) and pay amortizations in GBP (= £5.1M ÷ 40 or €150k ÷ 0.85 = £127.5k). The GBP principal will therefore be amortized quarterly on a straight-line basis, in parallel with the EUR principal.

• Interest: at each period, the company will receive interest in EUR (3-month Euribor floored at 0% + 0.75%) based on the outstanding EUR principal and pay interest in GBP (2.18%) based on the outstanding GBP principal.

Ultimately, the company will thus receive via the CCS all the cash flows payable on its EUR debt: it will therefore have no net EUR flows to pay and will have successfully converted its EUR debt into fixed-rate GBP debt.