Definition
FX Spread
The cost an LP pays to convert local currency to the SPV's base currency.
FX spread is the difference between the mid-market exchange rate and the rate at which an LP's local-currency wire is converted into the SPV's base currency (typically USD). Transparent SPV platforms quote the FX spread upfront — for example, mid-market USD/BRL plus a fixed bps spread — so the LP knows exactly how many dollars their wire will buy. Hidden FX spreads are one of the largest invisible costs in cross-border SPV funding; transparent quoting is a meaningful trust signal for international LPs.