The table below presents the costs of borrowing for Amazon and ExxonMobil in Dollars and...
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The table below presents the costs of borrowing for Amazon and ExxonMobil in Dollars and Swiss Francss, and the quotes for interest swaps in Dollars and Swiss Francss, both quoted against LIBOR. Amazon would like to get a SFr 42,000,000.00 fi xed rate loan. ExxonMobil would like to get a $3,500,000.00 fixed rate loan. How much can Amazon save each year if they enter a currency swap agreement? Borrowing Cost Borrowing Cost in Dollar in Swiss Francs $7.00% SFr 5.35% $8.40% SFr 4.00% Amazon Exxon Mobil SFR Swap Bank Quote USD Bid Ask $7.00% $8.07% Bid SFr 4.00% Ask SFr 5.09% SFr 109,200 OSFr 567,000
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