Global Banks Hike Swap Rates to 300–1,100 bps on SK Hynix and Samsung Bets
C•Brokers Citigroup, JPMorgan and Goldman Sachs have raised financing costs on hedge fund swap bets for SK Hynix and Samsung Electronics to 300–1,100 basis points above SOFR. Morgan Stanley is declining new swap orders and banks have imposed size limits after SK Hynix shares tripled and Samsung Electronics climbed 175%.
1. Swap Financing Cost Hikes
Citigroup, JPMorgan, Goldman Sachs, Bank of America, BNP Paribas and UBS have increased swap financing rates on SK Hynix and Samsung Electronics to a range of 300–1,100 basis points above SOFR, translating into nearly 15% at the top end of the range.
2. Trade Size Restrictions and Order Rejections
Morgan Stanley is turning away clients seeking new swap trades in the two Korean chip stocks, while other banks have tightened the size of new trades or are evaluating requests on a case-by-case basis.
3. Chipmaker Share Performance
SK Hynix shares have more than tripled this year and Samsung Electronics has climbed over 175%, driving Korea’s Kospi index up roughly 100% before a recent pullback in both stocks.
4. Market and Revenue Implications
Elevated financing costs and trade curbs could curb hedge fund leverage and dampen speculative demand, potentially reducing prime brokerage fee income for the banks involved.
