From: Barrett, Paul S
Sent: Friday, April 15, 2016 12:45 PM
To: Brad Wechsler
Cc: Jeffrey Epstein (jeevacation@gmail.com); Barrett Team; Nelson, Justin D
Subject: EUR Cross-Currency Funding Strategy to cheapen a EURO denominated floating rate
loan
Brad
If Leon or the company has EURO denominated loansR=0;...read on.
- =nbsp; Credit lines at many banks floor the floating index=at 0%. With 1-month Euribor fixing at -0.342%, many
borrowers don't r=alize the benefit of negative interest rates.
=nbsp; You can bypass this floor by borrowing in USD at 1-m=nth Libor (plus a spread) and using a cross-currency
swap to create a synth=tic EUR loan. This allows you to not only capture the benefit of negative r=tes but also cheapen
funding from the cross-currency differential in the market.
Current Sample Borrowing
Outstanding EUR loan @ 1-month Euribor + 100 bps<=:p>
<=:p>
Steps to create a Synthetic EUR Loan=/u>
1) Drawn down EUR equivalent notional from your=USD Line @ 1-month Libor + 100 bps
c=:p>
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2) You are left with EUR interest payments and exposure= All USD flows net out. See net exposure below.
Results
</=pan>
- =nbsp; By creating a synthetic EUR loan via cross-currency=swaps, you can reduce funding costs by roughly 55 bps
for 1 year (combinatio= of savings from negative Euribor rates and negative cross-currency basis).=u>
All pricing is indica=ive
&n=sp;
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ser=f";color:#5F5F5F"> <=spa
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<=pan style="font-size:8.0pt;font-family:"Verdana","sans-ser=f";color:#1F497D">Paul Barrett I Managing Director I
Global Investment Opportunities Group I J.P. Morgan Securities LLC I J.P. Morgan Private Bank =.I.P. Morgan Chase
Bank N.A.
320 Park Avenue, 14th Floor, New York, NY 10=22 I T: I F:
NOT AN=OFFICIAL CONFIRMATION: For informational=purposes only. This report does not represent an official account
of=the holdings, balances, or transactions made in your account and is being p=ovided at your request. Please refer to
your monthly account statement for the official record of all of your ac=ount activities. For question, please call your J.P.
Morgan represent=tive.
In discussion of options and other strategies, results and risks ar= based solely on hypothetical examples cited; actual
results and risks will=vary depending on specific circumstances. Investors are urged to consider carefully whether option
or option-related=products in general, as well as the products or strategies discussed herein=are suitable to their needs.
In actual transactions, the client's cou=terparty for OTC derivatives applications is JPMorgan Chase Bank, N.A., and
affiliates. For a copy of the "Char=cteristics and Risks of Standardized Options" booklet, please contact=your JPMorgan
Advisor.
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This e=ail is confidential and subject to important disclaimers and conditions inc=uding on offers for the purchase or sale
of securities, accuracy and completeness of information, viruses, conf=dentiality, legal privilege, and legal entity
disclaimers, available at http://www.jpmorgan.com/pages/disclosu=es/email
<http://www.=pmorgan.com/pages/disclosures/email> .
This email is confidential and subject to important disclaimers and conditio=s including on offers for the purchase or sale
of securities, accuracy and=completeness of information, viruses, confidentiality, legal privilege, and=legal entity
disclaimers, available at http://www.jpmorgan.com/pages/disclosures/email
<http://www.jpmorgan.com/p=ges/disclosures/email> <=span>
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