FX swap

Product description

The object of an FX swap transaction is simultaneous conclusion by the Parties of two opposing transactions - current FX (e.g. purchase of currency at today's value date) and a forward transaction (e.g. sale of the same currency amount for a selected date in the future).

Conclusion of an FX swap transaction thus permits effectively obtaining temporary liquidity in any currency without FX risk.

The transaction may also be used to move maturity of the forward transaction to a date other than agreed when concluding the forward transaction as well as for closing the transaction before maturity.

Benefits

Customer benefits:

• periodical currency exchange without carrying FX risk (obtaining liquidity in the currency)
• transparent way of settling the transaction
• possibility of offsetting an unfavourable FX rate from the day of concluding the FX swap transaction
• the forward transaction can be realised or closed faster
• possibility of choosing method of settlement of the forward transaction (with delivery of currency or by settlement of FX differences)
• flexible transaction parameters (settlement dates, transaction notional)
• FX swap transaction are off the balance sheet
  

Risks

• valuation of an FX swap transaction during its validity can be negative to the market, which means that in case of closing the position, this amount becomes the Customer's due and payable liability to the Bank
• if the market rate on the date of settlement of the FX swap transaction is higher/lower that the forward currency sale/purchase rate, the Customer will incur a loss on the FX swap in the amount of negative FX differences

Risk description is provided in „Description of risks associated with financial instruments and products offered in the Biznes and Corporate Banking Segment in Bank Millennium S.A.", as available in the Bank's outlets and on the Bank Web site www.bankmillennium.pl.

Additional information

If you are interested in treasury products please contact a Relationship Manager in the nearest Regional Corporate Centre or call a Product Specialist/Dealer:

Bydgoszcz, phone: (52) 325 94 22 / (22) 598 20 20
Gdańsk, phone: (58) 307 91 29, (58) 307 91 02 / (22) 598 20 25, (22) 598 50 54
Katowice, phone: (32) 784 08 28 / (22) 598 20 31, (22) 598 50 61
Kraków, phone: (12) 620 71 40 / (22) 598 50 56, (22) 598 20 23
Lublin, phone: (81) 531 77 45 / (22) 598 20 27
Łódź, phone: (42) 631 70 30 / (22) 598 50 52
Poznań, phone: (61) 885 69 75 / (22) 598 50 57, (22) 598 20 23
Szczecin, phone: (91) 434 82 62 / (22) 598 50 55
Warszawa, phone: (22) 598 50 63 / (22) 598 50 64, (22) 598 20 22, (22) 598 20 29
Wrocław, phone: (71) 370 41 94 / (22) 598 20 05

Legal disclaimers

All the information contained in this publication is for information purposes only and does not constitute either an offer or recommendation, or invitation addressed to anybody (or any group of people) to conclude transactions in financial instruments presented therein. In particular, the information contained in this publication does not constitute an offer in the understanding of the Civil Code Act dated April 23 1964 and is not a service of investment, financial, tax, legal or any other advisory.

This publication contains position of Bank Millennium S.A. („Bank") expressed on the basis of its own assessment of the facts material for the Bank and relative laws. The Bank assures that has spared no due diligence for the information contained in this publication to be reliable and based on authoritative sources, however, it cannot warrant that the information from sources external to the Bank is reliable, complete or up to date. Additionally, the Bank advises that the information and analyses contained in the publication have been based on the information derived from public sources that have not been independently verified by the Bank, and furthermore, can be subject to periodic fluctuations. The Bank shall not be held liable for any financial consequences of customer's transactions in financial instruments described in this publication. Also, the Bank reserves the right to make changes both in the form and in the content of this publication, at any time and without prior notice.

The conditions contained in the publication are of indicative nature only. All prices and (or) examples of transactions serve as illustration only and do not constitute a transaction offer under such conditions, or indication that the transaction under such conditions is possible. Furthermore, any calculations or results presented in this publication do not warrant future profits. The real terms and conditions for transactions in financial instruments shall be marked to market as established at the moment of transaction conclusion. All the tentative price quotations and analyses contained in this publication have been prepared on the basis on assumptions and parameters reflecting Bank's assessment or selection. The Bank does not warrant precision, completeness or rationale of these quotations or analyses.

The risk of utilisation of the information contained in this publication, in particular, as regards taking investment decisions on the grounds thereof, shall be carried exclusively by its recipient.

Financial transactions entail a risk, as presented in detail in „Description of risk related to financial instruments and products at Bank Millennium S.A."1), available at Bank's outlets and website at www.bankmillennium.pl. Everybody who purchases financial instrument assumes and carries liability for tax obligations resulting from the laws in force. In view of the above risks and circumstances, Bank's customers should have indispensable knowledge and experience in order to evaluate nature of every financial transaction under review and risks related thereto. In case of any doubts, customers should use tax, legal or investment advisory services. The Bank shall provide any additional information reasonably requested by the customer to enable assessment of related risks and transaction character.

Conclusion of transactions in financial instruments by the customer constitutes the grounds to recognise that the customer reviewed the transactions and related risks, and accepted them.

Dissemination and distribution of financial instruments and trading in them, may be subject to limitations in relation to some persons and states, in accordance with proper legislation. Demonstration of legal capacity and authorisations for investment in a given financial instrument rests with the customer. Offering and trading in financial instruments may be performed only in compliance with proper regulations of the law.

The information contained herein is disclosed exclusively for its recipient. The recipient is not entitled to copy, reproduce or transfer and disclose it to third persons in any manner, be it in full or in part (except for transferring it to his professional advisors) without prior written consent of the Bank.