- Agreement to exchange principals in two currencies and associated interest payments
- It is intended for individuals and legal entities – both Czech and foreign residents
- One party (A) agrees to purchase financial funds in currency 1 from another party (B) for certain amount in currency 2 – at a fixed date
- At the same time, party A agrees to resell the same amount in currency 1 for certain amount in currency 2, at the same exchange rate and at a fixed later date
- During the contract term, both parties exchange interest payments on currencies they initially purchased from each other
- Floating interest rates are fixed and compared to a fixed rate (for fixed to float CCS) or two floating rates are fixed (for float to float CCS) two business days prior to the start of individual interest periods
- Transaction is settled at the end of interest periods
- Consult the Markets in Financial Instruments Directive and receive current information
Cross Currency Swap cancellation
During the contract term, counterparties may agree on CCS cancellation.
- When cross currency swap is cancelled, its market value is settled by means of a one–off settlement, the whole transaction is cancelled, together with all future liabilities – interest payments made prior to CCS cancellation are not refunded
- As of the CCS cancellation date, parties agree on a price at which they are willing to withdraw from the transaction
- Losing party pays the agreed amount (CCS market price) to the other party at the spot value and the transaction is cancelled
- In case CCS is not cancelled as of an interest payment settlement date, any unsettled difference of interest rate income and expense from the cancelled swap settled to date shall be included in the swap market price
