Volume 5 Reading 38 Problem 14

I’m consused by the answer to this problem. The question says the company can issue in euro and it then swaps to CHF. This means that in the swap it will be paying EUR and receiving CHF. The answer, however, says that it it receives EUR and pays CHF. Can someone please explain why?

Draw a diagram to help you understand this.

At the start:

Company -> Issues Euro Bond - Receives Euros in Hand

Enters into Swap - pays notional principal in Euros to Swap CounterParty, receives CHF Notional Principal in return. (This is at the current Exchange rate).

During the Swap -> it will pay interest on CHF and Receive Interest in EUR.

… and this is what is being done above.