According to the newspaper i on Thursday, citing the report of the Directorate General of the Treasury on the financial situation of state enterprises, 57 contracts ‘swap’ had one negative market value of 1.6215 billion of euros, with the worsening of potential losses to be explained by lower interest rates.
In the previous quarter, this value was EUR 1.5428 billion. In the first quarter of 2013, the amount is no longer comparable, since contracts have been canceled since then.
According to DGTF, this trend is due to the decrease in the general level of interest rates this period. The potential loss resulting from the difference between the market rate and the rate of the swap contract. This framework enhances the sensitivity of firms to changes in the interest rate: a decrease of 1% would exacerbate the potential losses in EUR 151.6 million, an increase of 1% would have a favorable impact of € 117.7 million.
The nine contracts signed with Santander, which are being challenged in court, “represent the largest share of losses of EUR 1.2616 billion in the first quarter,” details the daily.
These swaps, which have the weight in the total amount of contracted instruments, were primarily responsible for the aggravation of the negative market value, contributing € 61.4 million, the source adds.
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