Theory of the comparative advantage

Question

How theory of the comparative advantage relates to the currency swap market?

Answer 1

Name recognition is really important in international bond market.  Without it, even the creditworthy corporation will find itself paying the higher interest rate for foreign denominated funds as compared to the local borrower of equivalent creditworthiness.  Consequently, two firms of the equivalent creditworthiness can each exploit their respective name recognition by borrowing in their local capital market at a favorable rate and then re-lending at same rate to the other.