Acme's US operations generate US dollar cash flows that pay the US-dollar index payments. They are often negotiated as part of the whole issuance package with the main issuing financial institution. Interest rate swaps allow companies to focus on their comparative advantage in borrowing in a single currency in the short end of the maturity spectrum vs. the long-end of the maturity spectrum. Currency swaps allow companies to exploit advantages across a matrix of currencies and maturities. The success of the currency swap market and the success of the Eurobond market are explicitly linked.
Companies have to come up with the funds to deliver the notional at the end of the contract.
They are obliged to exchange one currency's notional against the other currency's notional at a fixed rate. The more actual market rates have deviated from this contracted rate, the greater the potential loss or gain. This potential exposure is magnified with time. Volatility increases with time. The longer the contract, the more room for the currency to move to one side or other of the agreed upon contracted rate of principal exchange.