From: "Barrett, Paul S"

From: "Barrett, Paul S" To: Brad Wechsler <1 k "Jeffrey Epstein (jeevacation®gmail.com)" <[email protected]> CC: "Nelson, Justin D" Subject: EUR Cross-Currency Funding Strategy to cheapen a EURO denominated floating rate loan Date: Mon, 06 Jun 2016 17:15:22 +0000 Brad/Jeffrey For clients that have EUR based Libor loans. Credit lines at many banks floor the floating index at 0%. With 1-month Euribor fixing at -0.25%, many borrowers don't realize the benefit of negative interest rates. You can bypass this floor by borrowing in USD at 1-month Libor (plus a spread) and using a cross-currency swap to create a synthetic EUR loan. The cross currency basis swap pays me USD Libor and you pay -0.35% (so 35bps actually get paid to you as it is negative). This allows you to not only capture the benefit of negative rates but also cheapen funding from the cross-currency differential in the market. Results - By creating a synthetic EUR loan via cross-currency swaps, you can reduce funding costs by roughly 60 bps for 2 years (combination of savings from negative Euribor rates and negative cross-currency basis). Paul Paul Barrett I Managing Director I Global Investment Opportunities Group I E. Morgan Securities LLC E. Morgan Private Bank I M. Morgan Chase Bank M. 320 Park Avenue, le Floor, New York, NY 10022 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 provided at your request. Please refer to your monthly account statement for the official record of all of your account activities. For question, please call yours Morgan representative. In discussion of options and other strategies, results and risks are 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 counterparty for OTC derivatives applications is JPMorgan Chase Bank, M., and affiliates. For a copy of the "Characteristics and Risks of Standardized Options" booklet, please contact your JPMorgan Advisor. This email is confidential and subject to important disclaimers and conditions 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 l- p://www.ipmorgan.com/pages/disclosures/email. This email is confidential and subject to important disclaimers and conditions 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://wwwjpmorgan.corn/pages/disclosures/email EFTA00636315