A callable range accrual note (callable RAN) in which the coupon depends on the daily fixing of a foreign reference index being within a preset range. The underlying index may be 6-month LIBOR for a U.S firm or investor. The holder can take advantage of increasing foreign volatility by selecting an index denominated in a foreign currency, while receiving coupons in domestic currency (US dollar). In this case, American investors can avail from currently high foreign implied volatility without having to be a counterparty to a cross currency swap.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Comments