In August 2002, the French retail giant Carrefour SA was considering alternative currencies to increase (EUR) EUR 750 million in the euro bond market. Carrefour investment bankers believed that the bonds will be issued at 5.25% in Euro, 5.375% in British pounds, 3.625% in Swiss francs and 5.5% in U.S. dollars. Despite the high nominal coupon and the lack of any material business activities in the United Kingdom, the British pound output at the lowest cost of funds will provide. This cas … Read more »

In August 2002, the French retail giant Carrefour SA was considering alternative currencies to increase (EUR) EUR 750 million in the euro bond market. Carrefour investment bankers believed that the bonds will be issued at 5.25% in Euro, 5.375% in British pounds, 3.625% in Swiss francs and 5.5% in U.S. dollars. Despite the high nominal coupon and the lack of any material business activities in the United Kingdom, the British pound output at the lowest cost of funds will provide. This case was designed to introduce topics in international finance such as interest rate parity, currency risk management and the euro bond market. The students are researching why the future exchange rates vary by location and proposes a euro bond financing strategy for Carrefour commissioned.
This is a Darden case study.
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Michael J. Schill
Source: Darden School of Business
10 pages.
Release Date: 08 June, 2005. Prod #: UV0283-PDF-ENG
Carrefour S.A. HBR case solution