Position: none, though I own TIPS, realizing that they are only second best to developed market
foreign currency debt, and the US Labor department controls the CPI calculation...
It, and
the foreign currency debt servicing payments, are therefore subject to valuation effects when the exchange rate changes; currency depreciation increases the debt - servicing costs in Australian dollar terms.
Entities in smaller markets typically issue
foreign currency debt in offshore bond markets because they can issue larger, lower - rated and / or longer - maturity bonds than they can (at least at comparable prices) in their domestic market.
Those countries with less - developed institutions and financial systems, limited policy credibility, greater
foreign currency debt and / or more precarious economic situations are certainly more exposed than others to external shocks.
Unhedged
foreign currency debt, as was prominent in 1997, means that a fall in the currency pushes up debt servicing costs for the government, local corporates and banks, but a rise in interest rates to assist the exchange rate has the same adverse effect.
The rouble has weakened some 30 percent versus the dollar this year, as Western sanctions over the Ukraine crisis have made it harder for banks and companies to refinance
foreign currency debts and as tumbling oil prices have hurt government revenue.
Not exact matches
And while most emerging market
debt continues to be issued in local
currencies, the IIF said that
foreign currency denominated
debt issued in these nations swelled by $ 800 billion last year to a record high of $ 8.3 trillion.
Important factors that could cause actual results to differ materially from those reflected in such forward - looking statements and that should be considered in evaluating our outlook include, but are not limited to, the following: 1) our ability to continue to grow our business and execute our growth strategy, including the timing, execution, and profitability of new and maturing programs; 2) our ability to perform our obligations under our new and maturing commercial, business aircraft, and military development programs, and the related recurring production; 3) our ability to accurately estimate and manage performance, cost, and revenue under our contracts, including our ability to achieve certain cost reductions with respect to the B787 program; 4) margin pressures and the potential for additional forward losses on new and maturing programs; 5) our ability to accommodate, and the cost of accommodating, announced increases in the build rates of certain aircraft; 6) the effect on aircraft demand and build rates of changing customer preferences for business aircraft, including the effect of global economic conditions on the business aircraft market and expanding conflicts or political unrest in the Middle East or Asia; 7) customer cancellations or deferrals as a result of global economic uncertainty or otherwise; 8) the effect of economic conditions in the industries and markets in which we operate in the U.S. and globally and any changes therein, including fluctuations in
foreign currency exchange rates; 9) the success and timely execution of key milestones such as the receipt of necessary regulatory approvals, including our ability to obtain in a timely fashion any required regulatory or other third party approvals for the consummation of our announced acquisition of Asco, and customer adherence to their announced schedules; 10) our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing and our other customers; 11) our ability to enter into profitable supply arrangements with additional customers; 12) the ability of all parties to satisfy their performance requirements under existing supply contracts with our two major customers, Boeing and Airbus, and other customers, and the risk of nonpayment by such customers; 13) any adverse impact on Boeing's and Airbus» production of aircraft resulting from cancellations, deferrals, or reduced orders by their customers or from labor disputes, domestic or international hostilities, or acts of terrorism; 14) any adverse impact on the demand for air travel or our operations from the outbreak of diseases or epidemic or pandemic outbreaks; 15) our ability to avoid or recover from cyber-based or other security attacks, information technology failures, or other disruptions; 16) returns on pension plan assets and the impact of future discount rate changes on pension obligations; 17) our ability to borrow additional funds or refinance debt, including our ability to obtain the debt to finance the purchase price for our announced acquisition of Asco on favorable terms or at all; 18) competition from commercial aerospace original equipment manufacturers and other aerostructures suppliers; 19) the effect of governmental laws, such as U.S. export control laws and U.S. and foreign anti-bribery laws such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad; 20) the effect of changes in tax law, such as the effect of The Tax Cuts and Jobs Act (the «TCJA») that was enacted on December 22, 2017, and changes to the interpretations of or guidance related thereto, and the Company's ability to accurately calculate and estimate the effect of such changes; 21) any reduction in our credit ratings; 22) our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components; 23) our ability to recruit and retain a critical mass of highly - skilled employees and our relationships with the unions representing many of our employees; 24) spending by the U.S. and other governments on defense; 25) the possibility that our cash flows and our credit facility may not be adequate for our additional capital needs or for payment of interest on, and principal of, our indebtedness; 26) our exposure under our revolving credit facility to higher interest payments should interest rates increase substantially; 27) the effectiveness of any interest rate hedging programs; 28) the effectiveness of our internal control over financial reporting; 29) the outcome or impact of ongoing or future litigation, claims, and regulatory actions; 30) exposure to potential product liability and warranty claims; 31) our ability to effectively assess, manage and integrate acquisitions that we pursue, including our ability to successfully integrate the Asco business and generate synergies and other cost savings; 32) our ability to consummate our announced acquisition of Asco in a timely matter while avoiding any unexpected costs, charges, expenses, adverse changes to business relationships and other business disruptions for ourselves and Asco as a result of the acquisition; 33) our ability to continue selling certain receivables through our supplier financing program; 34) the risks of doing business internationally, including fluctuations in foreign current exchange rates, impositions of tariffs or embargoes, compliance with foreign laws, and domestic and foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other
foreign currency exchange rates; 9) the success and timely execution of key milestones such as the receipt of necessary regulatory approvals, including our ability to obtain in a timely fashion any required regulatory or other third party approvals for the consummation of our announced acquisition of Asco, and customer adherence to their announced schedules; 10) our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing and our other customers; 11) our ability to enter into profitable supply arrangements with additional customers; 12) the ability of all parties to satisfy their performance requirements under existing supply contracts with our two major customers, Boeing and Airbus, and other customers, and the risk of nonpayment by such customers; 13) any adverse impact on Boeing's and Airbus» production of aircraft resulting from cancellations, deferrals, or reduced orders by their customers or from labor disputes, domestic or international hostilities, or acts of terrorism; 14) any adverse impact on the demand for air travel or our operations from the outbreak of diseases or epidemic or pandemic outbreaks; 15) our ability to avoid or recover from cyber-based or other security attacks, information technology failures, or other disruptions; 16) returns on pension plan assets and the impact of future discount rate changes on pension obligations; 17) our ability to borrow additional funds or refinance
debt, including our ability to obtain the
debt to finance the purchase price for our announced acquisition of Asco on favorable terms or at all; 18) competition from commercial aerospace original equipment manufacturers and other aerostructures suppliers; 19) the effect of governmental laws, such as U.S. export control laws and U.S. and
foreign anti-bribery laws such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad; 20) the effect of changes in tax law, such as the effect of The Tax Cuts and Jobs Act (the «TCJA») that was enacted on December 22, 2017, and changes to the interpretations of or guidance related thereto, and the Company's ability to accurately calculate and estimate the effect of such changes; 21) any reduction in our credit ratings; 22) our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components; 23) our ability to recruit and retain a critical mass of highly - skilled employees and our relationships with the unions representing many of our employees; 24) spending by the U.S. and other governments on defense; 25) the possibility that our cash flows and our credit facility may not be adequate for our additional capital needs or for payment of interest on, and principal of, our indebtedness; 26) our exposure under our revolving credit facility to higher interest payments should interest rates increase substantially; 27) the effectiveness of any interest rate hedging programs; 28) the effectiveness of our internal control over financial reporting; 29) the outcome or impact of ongoing or future litigation, claims, and regulatory actions; 30) exposure to potential product liability and warranty claims; 31) our ability to effectively assess, manage and integrate acquisitions that we pursue, including our ability to successfully integrate the Asco business and generate synergies and other cost savings; 32) our ability to consummate our announced acquisition of Asco in a timely matter while avoiding any unexpected costs, charges, expenses, adverse changes to business relationships and other business disruptions for ourselves and Asco as a result of the acquisition; 33) our ability to continue selling certain receivables through our supplier financing program; 34) the risks of doing business internationally, including fluctuations in foreign current exchange rates, impositions of tariffs or embargoes, compliance with foreign laws, and domestic and foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other
foreign anti-bribery laws such as the
Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad; 20) the effect of changes in tax law, such as the effect of The Tax Cuts and Jobs Act (the «TCJA») that was enacted on December 22, 2017, and changes to the interpretations of or guidance related thereto, and the Company's ability to accurately calculate and estimate the effect of such changes; 21) any reduction in our credit ratings; 22) our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components; 23) our ability to recruit and retain a critical mass of highly - skilled employees and our relationships with the unions representing many of our employees; 24) spending by the U.S. and other governments on defense; 25) the possibility that our cash flows and our credit facility may not be adequate for our additional capital needs or for payment of interest on, and principal of, our indebtedness; 26) our exposure under our revolving credit facility to higher interest payments should interest rates increase substantially; 27) the effectiveness of any interest rate hedging programs; 28) the effectiveness of our internal control over financial reporting; 29) the outcome or impact of ongoing or future litigation, claims, and regulatory actions; 30) exposure to potential product liability and warranty claims; 31) our ability to effectively assess, manage and integrate acquisitions that we pursue, including our ability to successfully integrate the Asco business and generate synergies and other cost savings; 32) our ability to consummate our announced acquisition of Asco in a timely matter while avoiding any unexpected costs, charges, expenses, adverse changes to business relationships and other business disruptions for ourselves and Asco as a result of the acquisition; 33) our ability to continue selling certain receivables through our supplier financing program; 34) the risks of doing business internationally, including fluctuations in foreign current exchange rates, impositions of tariffs or embargoes, compliance with foreign laws, and domestic and foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other
Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad; 20) the effect of changes in tax law, such as the effect of The Tax Cuts and Jobs Act (the «TCJA») that was enacted on December 22, 2017, and changes to the interpretations of or guidance related thereto, and the Company's ability to accurately calculate and estimate the effect of such changes; 21) any reduction in our credit ratings; 22) our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components; 23) our ability to recruit and retain a critical mass of highly - skilled employees and our relationships with the unions representing many of our employees; 24) spending by the U.S. and other governments on defense; 25) the possibility that our cash flows and our credit facility may not be adequate for our additional capital needs or for payment of interest on, and principal of, our indebtedness; 26) our exposure under our revolving credit facility to higher interest payments should interest rates increase substantially; 27) the effectiveness of any interest rate hedging programs; 28) the effectiveness of our internal control over financial reporting; 29) the outcome or impact of ongoing or future litigation, claims, and regulatory actions; 30) exposure to potential product liability and warranty claims; 31) our ability to effectively assess, manage and integrate acquisitions that we pursue, including our ability to successfully integrate the Asco business and generate synergies and other cost savings; 32) our ability to consummate our announced acquisition of Asco in a timely matter while avoiding any unexpected costs, charges, expenses, adverse changes to business relationships and other business disruptions for ourselves and Asco as a result of the acquisition; 33) our ability to continue selling certain receivables through our supplier financing program; 34) the risks of doing business internationally, including fluctuations in
foreign current exchange rates, impositions of tariffs or embargoes, compliance with foreign laws, and domestic and foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other
foreign current exchange rates, impositions of tariffs or embargoes, compliance with
foreign laws, and domestic and foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other
foreign laws, and domestic and
foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other
foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other things.
And while Macdonald did not look into it, other studies have pointed to another major influence China has had lately on many countries, including Canada: how its high savings rate and mounting
foreign currency reserves, much of it invested in benchmark U.S. government
debt, have depressed interest rates around the world.
The downside: high
foreign debt, «excessive»
currency volatility and meagre
foreign - exchange reserves.
It puts 25 % into
foreign stocks, 25 % into U.S. Treasuries, and 10 % each into commodities, emerging - market
currency, bank loans, high - yield bonds, and 5 % each into TIPS and local -
currency emerging - market
debt.
Capital outflows lead to a weaker
currency, which concerns the hordes of Chinese companies that borrowed
debt in
foreign currencies over the past few years and now have to pay it back with a weaker yuan.
Now, emerging markets have flexible - exchange rates, much less
foreign debt, and substantially larger reserves of
foreign currency.
A reserve
currency is a
foreign currency held by central banks and other major financial institutions as a means to pay off international
debt obligations.
A government that is sovereign in its
currency, has no
foreign denominated
debt and a central bank that can issue its own
currency does not have to worry about someone else telling them that they need to raise their interest costs.
We had a bunch of countries with pegged
currencies who were experiencing trade imbalances,
foreign denominated
debt crises, ultimately leading to economic slowdown,
foreign currency turmoil, commodity turmoil and economic turmoil.
This means that countries that owe
foreign debt, that's almost all denominated in dollars, especially to the International Monetary Fund or the World Bank, they're going to have to pay much more money in higher - priced dollars for their own
currency.
Germany attempted to print paper notes, buy
foreign currency with them, and use that to pay their
debts.
And these deficits are now being financed in riskier ways: more
debt than equity; more short - term
debt than long - term
debt; more
foreign -
currency debt than local -
currency debt; and more financing from fickle cross-border interbank flows.
Also, we have offers for over 500 billion rupees
debt at very competitive rates, both
foreign currency and local.»
As do
foreign investors in local
currency debt that want exposure to domestic credit and interest rates, but not exchange rates, as well as other non-residents who are willing and able to take on exchange rate risk.
[9] Nonetheless, for emerging Asian economies there has tended to be a positive association between increased
foreign holdings of local
currency government
debt and growth in onshore FX derivatives turnover.
In contrast to banks and other financial corporations, the non-financial sector's
foreign currency liabilities have risen since 2009, consistent with an increase in borrowings in
foreign debt markets by larger corporations (particularly in the mining sector).
To some extent, these concerns are allayed by the existence of natural hedges, such as
foreign currency export income, although rising US dollar - denominated
debt servicing costs at a time of falling US dollar - denominated commodity revenues would obviously be problematic.
The ruble's exchange rate has fallen as more rubles are thrown onto
currency markets to obtain the dollars needed to pay interest and
debt service on
foreign loans (and to sustain capital flight in the absence of controls).
Banks «earned their way out of
debt» by lending to global speculators who used the yen loans to convert into
foreign currency and buy higher - yielding assets abroad — capped by Icelandic government bonds paying 15 %, and pocketing the arbitrage difference.
This in turn reflected a compositional shift towards equity liabilities (which are denominated almost entirely in Australian dollars) and away from
debt liabilities (some of which are denominated in
foreign currencies).
The impact of the kwanza's further devaluation against the dollar would be significant because 78 % of the government
debt was denominated in or linked to
foreign currencies (primarily the US dollar) at the end of 2016.
But even if the ECB does bend to the will of the bond markets this year, and begins to buy sovereign
debt directly, the single
currency is left with all of the same weaknesses that existed prior to the crisis: the inability to tailor interest rate policy for each individual economy, the lack of
foreign currency adjustment needed to offset differences in competitiveness, and growth - limiting trade dynamics throughout the area.
In a related development, China's State Administration of
Foreign Exchange (SAFE) issued new rules on Wednesday relaxing restrictions on multinational companies» management of their foreign currency - denominated debt in China, allowing them to pool debt from all their subsidiaries for central mana
Foreign Exchange (SAFE) issued new rules on Wednesday relaxing restrictions on multinational companies» management of their
foreign currency - denominated debt in China, allowing them to pool debt from all their subsidiaries for central mana
foreign currency - denominated
debt in China, allowing them to pool
debt from all their subsidiaries for central management.
The fact that the domestic private sector also had some
foreign loan assets (as taken into account in net
debt measures) would be of little assistance in such a
currency crisis.
The other aspect of
foreign debt that has received a lot of attention in the light of recent Asian developments is the extent of unhedged
foreign currency borrowing.
In normal times, Section 18 of the Act says the Bank can only buy (or sell) certain types of assets — coins,
foreign currencies, federal and provincial / territorial
debt,
debt issued by the U.S., Japan or the European Union, International Monetary Fund (IMF) special drawing rights, and bills of exchange or promissory notes issued by a bank or authorized
foreign bank provided they have a maturity of no more than 180 days.
I think it is true to say that there has not been a lot of unhedged
foreign currency borrowing occurring among Australian corporates since the days of the «Swiss franc loans» of the mid-eighties, but I will postpone discussion of that topic until I deal with
foreign debt in the second half of this talk.
Despite the difficulties endured during the era of post-Lehman austerity, commercial and private - sector
debt levels are low: Nonperforming loans are below 5 % and the banking system, unlike those of Poland or Hungary, did not have to tackle the fallout from high levels of
foreign currency loans, because low interest rates and a stable Czech koruna meant these weren't taken up in large quantities.
A bit more than half of the gross external
debt is denominated in
foreign currencies.
Their trade deficits have been financed by the global property bubble — borrowing in
foreign currency against property that was free of
debt at the time of independence.
However, the effect this has on the net income deficit is being roughly offset by the corresponding valuation impact on
foreign assets, since these are of similar magnitude to the
foreign -
currency - denominated component of external
debt.
Examples of these risks, uncertainties and other factors include, but are not limited to the impact of: adverse general economic and related factors, such as fluctuating or increasing levels of unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence; adverse events impacting the security of travel, such as terrorist acts, armed conflict and threats thereof, acts of piracy, and other international events; the risks and increased costs associated with operating internationally; our expansion into and investments in new markets; breaches in data security or other disturbances to our information technology and other networks; the spread of epidemics and viral outbreaks; adverse incidents involving cruise ships; changes in fuel prices and / or other cruise operating costs; any impairment of our tradenames or goodwill; our hedging strategies; our inability to obtain adequate insurance coverage; our substantial indebtedness, including the ability to raise additional capital to fund our operations, and to generate the necessary amount of cash to service our existing
debt; restrictions in the agreements governing our indebtedness that limit our flexibility in operating our business; the significant portion of our assets pledged as collateral under our existing
debt agreements and the ability of our creditors to accelerate the repayment of our indebtedness; volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees; fluctuations in
foreign currency exchange rates; overcapacity in key markets or globally; our inability to recruit or retain qualified personnel or the loss of key personnel; future changes relating to how external distribution channels sell and market our cruises; our reliance on third parties to provide hotel management services to certain ships and certain other services; delays in our shipbuilding program and ship repairs, maintenance and refurbishments; future increases in the price of, or major changes or reduction in, commercial airline services; seasonal variations in passenger fare rates and occupancy levels at different times of the year; our ability to keep pace with developments in technology; amendments to our collective bargaining agreements for crew members and other employee relation issues; the continued availability of attractive port destinations; pending or threatened litigation, investigations and enforcement actions; changes involving the tax and environmental regulatory regimes in which we operate; and other factors set forth under «Risk Factors» in our most recently filed Annual Report on Form 10 - K and subsequent filings by the Company with the Securities and Exchange Commission.
With the weakening of the lira against the dollar, the private sector will have a harder time repaying its
foreign currency - denominated
debt, S&P said, adding this would negatively impact government
debt — 40 percent of which is denominated in
foreign currency.
Already Buhari has started giving excuses for the abysmal performance.He attributed the quagmire to drop in the price of oil globally and cleverly laid the blame on the doorsteps of all Nigerian accusing them of relying solely on oil.All renowned rating agencies including fitch continue to downgrade Nigeria ever since Buhari took over and it is projected that Nigeria will not be able to repay its
debt obligations.Fitch for instance downgraded Nigeria's longterm
foreign currency issuer default rating to B + from BB - and longterm local
currency IDR to BB - from BB.The general position expressed by almost all the Briton wood institutions is that Nigeria's fiscal and external vulnerability has worsened under Buhari and it is projected that the government's general fiscal deficit could grow up to 4.2 % by the end of 2016 after averaging 1.5 % under the previous regime.A recent capital importation report by Nigeria Bureau of Statistics confirms that, last year, the country recorded total inflow of capital into the economy stood at $ 9.6 billion which was a 53 % drop from previous year and the lowest recorded total since 2011.
Eligible Purchases means the amount of purchases of goods and services that are charged to your HSBC Advance Mastercard ® account except for quasi-cash transactions (which include purchases of wire transfers, travelers cheques,
foreign currency, money orders, payment of an existing
debt, bets, lottery tickets and gaming chips) less any credits for returns, rebates or adjustments.
The wild card is the
foreign investors; if more countries revalue their
currencies upward versus the dollar, reducing exports to the US, and reducing the need to buy our
debt, then interest rates could easily rise by another percent.
i expect financing arrangements either in
foreign currency or commodity backed arrangement so the US gov» t does not renege on its
debt again.
This is the index that my company, Pacific Park Financial, Inc., created for investors to consider investing in a combination of
currencies, commodities,
foreign debt and U.S.
debt.
A reduction of demand for U.S. short - term
debt, either by
foreign governments (particularly in the event that Asian governments decide to revalue their
currencies) or by U.S. investors, could have very undesirable consequences.
You may be able to include
foreign debts in a DMP, although
foreign creditors may charge you for converting payments between
currencies.
These investments are subject to the risk that a governmental entity may delay or refuse to pay interest or repay principal on its sovereign
debt, due, for example, to cash flow problems, insufficient
foreign currency reserves, political considerations, the relative size of the governmental entity's
debt position in relation to the economy or the failure to put in place economic reforms required by the International Monetary Fund or other multilateral agencies.
To preserve capital and to provide income and long - term growth primarily through investment in
debt securities denominated in
foreign currencies issued by Canadian or non-Canadian governments, corporations and financial institutions.
Large Canadian issuers running out of room in the Canadian
debt markets, provincial and corporate, have historically financed in
foreign currencies.