Videotron Ltee (Videotron)’s assistant of Treasury reflected on the Citibank’s propositions that lay on his desk. Videotron was about to launch an US$150 million, 10-year high output issue in nearly a week's time. Since the company of Videotron was transacted almost exclusively in Canadian dollars, it'd be exposed to foreign exchange risk on the US-dollar denominated interest and principal debt payments.
The crew from Citibank, which focused on exposure management, offered Videotron hedging strategies of either forwards or cross -currency swaps. (A Microsoft Excel spreadsheet is available to be used with this situation, merchandise 7A96B021.)
Learning Objective: The aims of this case are to educate pupils about: FX forward contracts; cross-currency SWAPs; FX exposure management; foreign exchange markets; covered interest rates; high-yield debt market.
Publication Date: 05/14/1996
This is just an excerpt. This case is about Finance
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