Background: US company needs to borrow GBP 30m by borrowing USD in home country by USD36m and then swap the USD36m to GPB 30m. The EUR-USD Swap is quoted at -15 basis point and the swap is a four -year semi annual swap where both USD and GBP reference rate are based on six month LIBOR.
i am quite confused about the term “EUR-USD swap”. What does it mean? I cant distinguish this -15 basis point should be related to GBP interest on swap payment or USD interest swap receipt? Why EUR matters in this question?
Thanks a lot for your great help!!!