Power Reverse Dual Currency Note
A dual currency note (DC) pays coupons in the investor's domestic currency with the notional in the issuer’s domestic currency. A reverse dual currency note (RDC) is a note which pays a foreign interest rate in the investor's domestic currency. A power reverse dual currency note (PRDC Note) or power reverse dual currency bond (PRDC Bond) is an exotic financial structured product where an investor is seeking a better return and a borrower a lower rate by taking advantage of the interest rate differential between two economies. The power component of the name denotes higher initial coupons and the fact that coupons rises as the domestic/foreign exchange rate depreciates. The power feature comes with a higher risk for the investor, which characterizes the product as leveraged carry trade. Cash flows may have a digital cap feature where the rate gets locked once it reaches a certain threshold. Other add-on features include barriers such as knockouts and cancel provision for the issuer. PRDCs are part of the wider Structured Notes Market.
Read more about Power Reverse Dual Currency Note: Market, Payoff and Cashflows, Model, Computation, Hedging, PRDC During Subprime Crisis
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—François, Duc De La Rochefoucauld (1613–1680)
“We came home from the ridotto so late, or rather so early, that it was not possible for me to write. Indeed we did not go ... till past eleven o’clock: but nobody does. A terrible reverse of the order of nature! We sleep with the sun, and wake with the moon.”
—Frances Burney (1752–1840)
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declining,
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Went home and addressed a short note to the King:
If you please will excuse me
I won’t come to tea;
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All people like me!”
—Beatrice Curtis Brown (1901–1974)