Agreement Tenor

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An FX swap is two agreements to exchange a currency pair with two different value data in opposite directions. These agreements are called swap « legs. » The old leg is called « close leg, » and the latter is the « distant leg. » For example, a swap contract can be created to buy the currency on the date of the spot and sell the same amount in 1 month. Typically, part of a swap is a cash transaction, in which case the swap is essentially the futures component of a futures contract. However, it is also possible to perform a swap where both legs are forward. Swaps are often used to allow the billing date of a futures contract later (« rolled forward ») or earlier in time using a leg to terminate an existing futures contract. As a general rule, priority project debt providers need a cushion in the form of a « credit queue » between the duration of the debt or debt and the duration of the project contract itself. This allows the private partner to restructure the debt when faced with temporary solvency difficulties (renegotiation of an annual lower debt service in exchange for an extension of the term of the loan). The lifespan should also be long enough to allow potential customers to benefit from refinancing when market conditions improve (allowing the private party to benefit from a longer tone, a lower margin and potentially additional debt, i.e. a « consolidation »).

It may also have a refinancing strategy « from the outset » (based on « mini perm » loans or other bridge loans) to finance the construction period), so that the financial arrangement can be refinanced in the long term after construction. In finance, a advance rate agreement (FRA) is an interest rate derivative (IRD). In particular, it is a linear IRD with strong associations with interest rate swaps (IRS). The term tenor is also used for atypical financial instruments such as derivative contracts. In this context, it is frequently used when the risk-taking of a certain security is described. For example, a long-term contract could be described as relatively risky, as there is still a long time to see its value decrease. Derivatives with shorter tenors would also be considered less risky.

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