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Presented by : Sandip Jalebar Ankit Choubey Venkat Subramanian FOREIGN EXCHANGE INSTRUMENTS

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<ul><li>FC loan </li></ul><ul><li>FC notes </li></ul><ul><li>Fixed and floating rates </li></ul><ul><li>Commercial paper </li></ul><ul><li>FDI </li></ul><ul><li>ADRs </li></ul>

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This scheme is meant primarily for export oriented units who want to import capital goods to either diversify/expand /modernize or setup new unit to increase their competitiveness in global market at competitive interest rate.

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Foreign Currency Term Loan: With terms from 1 month right up to 5 years, you can free up your money tied in long-term assets such as Bonds, Structured Notes, Mutual Funds and obtain liquidity. Foreign Currency Leverage Loan: leverage loan facility against various investment products such as Bonds, Structured Notes. The leverage feature helps to enhance yield as you put in a part of the equity required for the investment and the balance is provided by the bank at competitive rates linked to LIBOR.

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FIXED INTEREST RATE With bond financing, your interest rate is fixed for the term of the loan. Budgeting is simplified by knowing interest and principal payments are fixed for the entire term of the loan. Concern about rising interest rates is eliminated. LONG-TERM LOAN, FULLY AMORTIZED Many bank loans are for only three to five years, with a large balloon payment due at the end of the term. Most bond issues are fully amortized over a five-to 20-year period, depending on your needs. Level debt service aids in budgeting, and ensures that the loan can eventually be retired without the hassle of refinancing every three to five years .

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*an unsecured promissory note with a fixed maturity of 1 to 270 days *a money-market security * the longer the maturity on a note, the higher the interest rate the issuing institution must pay

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*High credit ratings fetch a lower cost of capital. *Wide range of maturity provide more flexibility. *It does not create any lien on asset of the company. *Tradability of Commercial Paper provides investors with exit options.

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*Its usage is limited to only blue chip companies. *Issuances of Commercial Paper bring down the bank credit limits. *A high degree of control is exercised on issue of Commercial Paper. *Stand-by-credit may become necessary

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<ul><li> bonds that have a variable coupon, equal to a money market reference rate, like federal funds rate, plus a spread . </li></ul><ul><li>The spread is a rate that remains constant. Almost all FRNs have quarterly coupons, i.e. they pay out interest every three months, though counter examples do exist. </li></ul><ul><li>At the beginning of each coupon period, the coupon is calculated by taking the fixing of the reference rate for that day and adding the spread </li></ul>

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A fixed rate bond is a long term debt paper that carries a predetermined interest rate. The interest rate is known as coupon rate and interest is payable at specified dates before bond maturity.

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<ul><li>A dollar denominated negotiable certificate that represents a non-US company’s publicly traded equity. </li></ul><ul><li>Devised in late 1920s to help non-US companies to have their stock traded in the American markets Regulatory </li></ul><ul><li>Framework for the ADRs -Securities and Exchange Commission. </li></ul>

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<ul><li>To raise money from US market via ADR requires compliance with US GAAP </li></ul><ul><li>Voting rights to individual investors of directors of company. </li></ul><ul><li>Being personally liable to shareholders </li></ul>

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<ul><li>A negotiable instruments. </li></ul><ul><li>A global finance vehicle </li></ul><ul><li>Example : A European investor wanting an exposure in Indian securities could do so via two routes : </li></ul><ul><li>Enter Indian stock market & buy the company’s stock </li></ul><ul><li>Through GDRs </li></ul>

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<ul><li>Floating Bonds </li></ul><ul><li>Yankee Bonds </li></ul><ul><li>Samurai Bonds </li></ul><ul><li>Bulldog Bonds </li></ul><ul><li>Unsecured debt securities </li></ul><ul><li>EURO Bonds: </li></ul><ul><ul><li>Dollar denominated in U.K. </li></ul></ul><ul><ul><li>Yen denominated in U.S.A </li></ul></ul>

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<ul><li>www.investopedia.org </li></ul><ul><li>www.wikipedia.org </li></ul><ul><li>www.coinmill.com </li></ul><ul><li>International finance management </li></ul><ul><li>-by P. G. Apte </li></ul>

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<ul><li>presented by: </li></ul><ul><li>SANDEEP JALEBAR </li></ul><ul><li>MBA (management science) </li></ul><ul><li>IIPS, DAVV </li></ul><ul><li>[email_address] </li></ul>