Issuing a Bond vs a Swap

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Dudeinthecity24

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Would you expect that issuing a bond is more expensive than issuing a swap? All else equal!?
 
I dont quite understand what you mean.
If I was to issue a bond that would mean I am a public authority or a big, big company with an army of lawyers. I would need bookrunners or underwriters, depending on how it is done and there would be months in preparations, possibly a road show, ads, etc. So, in short, issuing a bond is a big undertaking.
There are many types of swaps but entering into a swap contract cannot be compared to issuing a bond. A very simple example would be the FX swap. That takes 2min. For example you could buy EUR spot and sell the same amount of EUR forward. That’s it. Another example would be an interest rate swap - also quite simple. You enter into a contract with a counterparty to exchange cash flows from a fixed rate for a floating rate or the other way round.
 
Issuing a bond means borrowing money. I assumed you meant ‘entering’ a swap, not ‘issuing’ it. Entering into a swap means you exchange one thing for another. They are different and cannot be compared.
 
cloud789 wrote:
Issuing a bond means borrowing money. I assumed you meant ‘entering’ a swap, not ‘issuing’ it. Entering into a swap means you exchange one thing for another. They are different and cannot be compared.
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Thank for the comments. What I wanted to understand is….if by replicating a bond entering into a swap ( short the fixed, long the float), you could essential replicate issuing a bond and make it cost effective since you wouldn’t have to pay breakage fees, etc.
I’m just asking if anyone has ever done something like this in the real world.
And eventhough, we can replicate the positions, it is not the same thing as issuing a bond.
*** take about 3 to 4 weeks *** to issue paper depending on the amount and the syndicate.
 
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