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Walmart has British pound denominated debt of GBP 4,370,000,000. The debt matures in 10 years and has a fixed interest rate of 5.
Walmart has British pound denominated debt of GBP 4,370,000,000. The debt matures in 10 years and has a fixed interest rate of 5.3%. Suppose that Walmart would like to use a swap to convert the fixed-rate GBP debt to a floating interest rate. The 10-year fixed swap rate for the GBP is quoted as the yield on the 10-year UK treasury bond + spread. The yield on a 10-year UK treasury is 1.21% and the bid-ask rate on the spread is being quoted as 7.30 - 15.3 basis points. The floating side of the swap will be GBP 6-month LIBOR.
1.What is the notional value of the swap?
