Table:
|  |  | Year Ended |  |
| --- | --- | --- | --- |
|  |  | December 31, |  |
|  | 2019 | 2018 | 2017 |
|  | $ | $ | $ |
| Realized gains (losses) on maturity and/or partial termination of cross currency swap | — | (42,271) | (25,733) |
| Realized losses | (5,062) | (6,533) | (18,494) |
| Unrealized (losses) gains | (13,239) | 21,240 | 82,668 |
| Total realized and unrealized (losses) gains on cross currency swaps | (18,301) | (27,564) | 38,441 |
Paragraphs:
Realized and unrealized losses of the cross currency swaps are recognized in earnings and reported in foreign exchange (loss) gain in the consolidated statements of loss. The effect of the gains (losses) on cross currency swaps on the consolidated statements of loss is as follows:
The Company is exposed to credit loss to the extent the fair value represents an asset in the event of non-performance by the counterparties to the foreign currency forward contracts, and cross currency and interest rate swap agreements; however, the Company does not anticipate non-performance by any of the counterparties. In order to minimize counterparty risk, the Company only enters into derivative transactions with counterparties that are rated A- or better by Standard & Poor’s or A3 or better by Moody’s at the time of the transaction. In addition, to the extent possible and practical, interest rate swaps are entered into with different counterparties to reduce concentration risk.
Question:
Why are interest rate swaps entered into with different counterparties?
Answer: to reduce concentration risk.