Interest Rate Swap

See: Yankee Bond.

Think about one bond denominated in euros, i.e. to be paid back in euros, and another to be paid back in U.S. dollars. If, at the time the bonds are issued, the exchange rate for the euro to the dollar is 1:1 and both bonds pay 6% interest, well, then the math is really easy and the currencies are fungible.

But let's say Brexit has teeth, and there's Frexit and Italexit and (insult of all insults) Grexit, and suddenly a dollar buys two euros...well, then that U.S. bond bought by Europeans who have to convert their euros to dollars to then pay the interest...just got a whole lot more expensive.

Like...now, currency-adjusted, the U.S. bond's interest is 12%, not 6% to euro holders or euro sensitive investors. And that hurts. More than the whole Grexit thing, even.