What is/are the risk(s) faced by Jazztel in borrowing medium-term debt denominated in U.S. dollars or euros, given its Business plan. Please, explain about the interest rate risk

Venturecapitalist and serialentrepreneur Martin Varsavskyprovided Jazztel'sinitial operating capital of pesetas (Pts) 60 million in June 1998. In February 1999 an ad- ditional 64-3 million of equity was raised from several private equity firms, such as Apax Partners and Advent International, which specialized in the financing of In April 1999, Jazztel expanded its financing base, successfully raising a two- tranche high-yield issue of 203.4 million.The offering consisted of 1oo,o00dollar- denominated units and 11o,000 euro-denominated units. Each unit was worth $1,000and1,000, respectively,andcarried fivewarrants for the purchase of Jazztel stock. The 1o-year notes carried a coupon rate of 14 percent. Of the C2o3-4 million in proceeds, 79.4 million was placed in an escrow ac- count to fund the first six biannual interest payments through 2001. No interest payments from company cash flow were scheduled until 2002. It was the largest such offering ever completed by a Spanish firm. Furthermore, the offering was two In July, to further support its capital expenditures (capex) requirements, the company secured a 300 million senior secured credit facility from a syndicate of banks, including Argenteria SA, Barclays Plc, and Chase Manhattan Corp., among others. The facility entailed two tranches: a C2oo million term loan and a C100 million revolving facility. The term loan (Tranche A) carried an interest rate of 3.75 percent over Euribor. The revolving facility (Tranche B) carried an interest rate of 2.5o percent over Euribor. Both facilities had an eight-yeartenor. Both tranches were available subject to an extensive series of availability tests. Drawdown was monitored by ongoing operational and financial covenants, such as minimum coverage ratios and minimum annualized direct customer revenue levels Although owning its own network was expected to eventually lower operating costs, the required capital expenditure for the network build-out was for- midable. Management expected cumulative capital expenditures to reach 566 million through 2003 with an additional C261 million required through 20o8 Additional funding was required, and the timing seemed right for another round of financing