INSTRUCTORS' NOTE: UTILIZING CURRENCY SWAPS TO HEDGE RISK AT SLC

St. Louis Chemical (SLC) is a regional chemical distributor, headquartered in St. Louis. Don Williams, the President and primary owner, began SLC ten years ago after a successful career in chemical sales and marketing. The company has gradually expanded its product line and network of manufactures....

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Bibliographic Details
Published in:Journal of the International Academy for Case Studies 2015-05, Vol.21 (4), p.51
Main Authors: Dow, Benjamin L, Kunz, David
Format: Article
Language:English
Subjects:
American dollar
Borrowing
Currency swaps
Financial analysis
Foreign exchange rates
Foreign subsidiaries
Hedging
Joint ventures
Studies
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Summary:St. Louis Chemical (SLC) is a regional chemical distributor, headquartered in St. Louis. Don Williams, the President and primary owner, began SLC ten years ago after a successful career in chemical sales and marketing. The company has gradually expanded its product line and network of manufactures. Five years age, SLC completed a joint venture with a German chemical distributer that included the option purchase the remaining 49% interest in the foreign subsidiary at a predetermined price. SLC is currently considering whether to exercise the option and more specifically, how to finance the debt needed to complete the purchase and reduce the additional currency risk that would accompany the conversion of the joint venture to a wholly owned subsidiary.
ISSN:1078-4950
1532-5822