![]() |
|
|
| Subject:
Swiss franc bonds
Category: Business and Money > Finance Asked by: missmallprincess-ga List Price: $4.50 |
Posted:
27 May 2004 08:50 PDT
Expires: 01 Jun 2004 08:00 PDT Question ID: 352698 |
I have noticed that the interest rate in Switzerland is below the rates in most other countries. I am, therefore, suggesting that my company should make an issue of Swiss franc bonds. What considerations should I first to take into account? |
|
| There is no answer at this time. |
|
| Subject:
Re: Swiss franc bonds
From: geotechnical-ga on 31 May 2004 09:23 PDT |
Be forewarned that I am just answering this off the top of my head, but these factors are relevant: Assuming your company is in the U.S., and conducts it's business in dollars, you will want to consider 1)the exchange rate (FX) & FX rate trend, 2)balance of trade between Switzerland (SZ) and US 3)the inflation rates of both countries 4)rate of growth in GDP in both. You want dollars. So the FX rate is going to determine how much your offering is going to have to be. The weaker the dollar the more you are going to have to issue in bonds to get the capital you need. If the dollar gets weaker over time then the SZ francs to pay your coupons on the bonds are going to cost more later than they would today, i.e. you will be paying an additional amount above the coupon rate to satisfy your interest obligations to your bond holders. This could work out to be more than you will be paying if you just issued the bonds here in the US. Changes in the inflation rate in SZ will affect the market interest rate and so the future value of your bonds. GDP growth and the trade balance will affect the future FX rate. |
If you feel that you have found inappropriate content, please let us know by emailing us at answers-support@google.com with the question ID listed above. Thank you. |
| Search Google Answers for |
| Google Home - Answers FAQ - Terms of Service - Privacy Policy |