Disliked{quote} Vodafone flows havent even begun yet - best estimates are for majority to flow at the WMR fix next tuesday, but no one knows for sure (this is coming from a few traders at different banks) http://www.vodafone.com/content/inde...ement.yes.html see last paragraph "the exact amount received will depend on the exchange rates obtained in the markets during the week commencing 24 February 2014."Ignored
The Vodafone transaction has already fixed... the press release gave the level. Thats probably why price ramped last week. That press release specifies specifically on the receipt of CASH the amount you will receive depends on the exchange rates prevailing next week because different investors have brokerage accounts denominated in different currencies. If your broker is USD, the base currency of Verizon is USD so you dont need to concern yourself with the FX rate. However if your broker is based in EUR the you cant have USD cash in the account so for your particular cash payout the current spot fx rate would be used.
Specifically for the SHARES you receive, you can have foreign shares denominated in other currencies so that is not mentioned in the press release. There is no case by case fx conversion for shares. Cash is the smaller portion of the transaction.
Broader point being that the transaction is marked at the share price and GBPUSD rate stated in the press release. That implies that any balance sheet hedges that Vodafone had on were removed at that level, and the translation from USD to GBP of the actual transaction was completed also at that level.
"he consolidation ratio is based on a mid-market closing price of Vodafone ordinary shares of 223.975 pence, a mid-market closing price of Verizon common shares of US$45.965 and a US dollar-sterling exchange rate of 1.6698, in each case on 18 February 2014."
You wouldn't complete this deal then then tell the public the day IN THE FUTURE where you were going to complete the (massive) FX transaction. Even if this were the case theres no possible way you would be able to do over 100bn in USD selling on one days fix.... or even an entire week of WMR fixes for that matter.
The vast majority of flows are already done. Marked at 1.6698.
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