What currency risks does Huaneng face
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Huaneng Power International is a large Chinese company that runs coal-fired power plants in five provinces and in Shanghai. It has close to $1.2 billion in U.S. dollar debt whose proceeds it has used to purchase equipment abroad.
a. What currency risks does Huaneng face?
b. Do its lenders face any currency risks? Explain.
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Solution Summary
This posting helps with questions about finance. It provides a detailed solutions to questions about international finances. It helps with questions about currency risks facing companies and lenders. Brief explanations are provided for each.
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Problem: Huaneng Power International is a large Chinese company that runs coal-fired power plants in five provinces and in Shanghai. It has close to $1.2 billion in U.S. dollar debt whose proceeds it has used to purchase equipment abroad.
a. What currency risks does Huaneng face?
ANSWER. The biggest problem for HPI is that its debt is denominated in dollars whereas ...
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