Situation
Chen and Sofia, who live in Oregon and run their own business, have a daughter attending the University of Oxford in England. The family wanted to purchase a vacation home in northern Spain, so that they could be near the university, as well as Sofia’s family. Chen and Sofia hoped to purchase the home using funds generated from their investments.
Our Approach
When Chen and Sofia’s J.P. Morgan team learned of their goal to purchase a home in Spain and of their daughter’s attendance at Oxford University, the team reached out to the Global Derivative Solutions team which was able to understand the international nature of their currency needs and analyze their existing portfolio. The Global Derivative Solutions team recommended pairing a USD-denominated loan with a EURUSD and GBPUSD cross-currency swaps with a custom schedule to match their foreign liabilities.
Outcome
The team was able to help Chen and Sofia understand how diversifying their USD-denominated portfolio to other currencies could help them achieve their current liquidity needs, help reduce FX risk in their portfolio and offer more avenues to invest in markets outside the U.S. The pair began diversifying their portfolio and was able to purchase a home in Spain with their investment income and allow them to visit their daughter while also giving her a second place to stay when she wasn’t attending university.