Foreign Currency Lending Solution using the Swiss Franc
Utilizing Cross Currency Swap
Currency Swaps can help mitigate the risk of unwanted interest rate fluctuations while further reducing interest expense.
In addition to US Dollar LIBOR based loans, Tax Efficient Solutions has access to use Swiss Franc LIBOR rates.
If a client wants to take full advantage of the Swiss Franc LIBOR rate, then we can offer the ability to use a cross currency swap. When using a cross currency swap, the client has a traditional USD loan (i.e., one-month US Dollar LIBOR plus the loan spread). Separately, they have a cross currency swap. With the cross currency swap, the client pays a fixed rate based upon Swiss Francs (CHF) swap rates, plus the swap costs, and receives one-month US Dollar LIBOR plus the loan spread. The one-month US Dollar LIBOR plus the loan spread received on the cross currency swap zeros out the one-month US Dollar LIBOR plus the loan spread paid on the loan. Therefore, the client’s effective interest rate is what they pay on the swap. All in, they are getting a lower overall fixed rate because we are using a cross currency swap to take advantage of the negative interest rates overseas, while using a safe haven currency to do so.
Advance Rate: We provide an advance rate of 95% on the cash surrender value.
We manage the estate plan in coordination with CPAs, bankers, and attorneys. We are the clients’ advocate and use all of our expertise to create and implement the plan that is best for the client and their family. A plan that minimizes tax exposure and maximizes their legacy will make sure that the client and their heirs receive everything that they have worked so hard to provide for them. Providing maximum control with tax efficiency provides a smooth conveyance of assets and guarantees the lifestyle and standard of living for the client, the clients’ children and their grandchildren.
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