Features

Interest Rate Derivatives can provide flexibility to create the interest rate profile you want for your company.

Hedge variable rate debt with different strategies.

Change your hedging profile based on changes in market interest rates, your business strategy or your risk appetite.

Potentially realize a gain from changing interest rates if you unwind an interest rate derivative prior to maturity.

Types of Derivatives

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Interest Rate Swaps

An interest rate swap allows your company to convert a floating rate loan into one that is essentially fixed-rate to protect against rising interest rates.

Advantages of interest rate swaps:

  • Multiple structures available
  • Terms tailored to match underlying loan(s)
  • Predictable execution
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Interest Rate Caps

Interest rate caps protect your company against rising interest rates by capping the interest rate on your floating rate loan.

Advantages of interest rate caps:

  • A fixed cost of insurance against a rise in rates while retaining floating rate debt provides benefit from lower rates
  • Flexible risk management and customization
  • Can be sold at current market value if the underlying loan is repaid or the protection is no longer needed
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Forward Starting Interest Rate Swaps

A forward starting interest rate swap is similar to a regular interest rate swap but instead of starting today, it becomes effective at a predetermined future date chosen by you.

Advantages of forward starting interest rate swaps:

  • Lock in a rate today for an expected future loan or loan renewal.
  • Provides rate protection on the permanent financing piece of current construction projects.
  • Flexible risk management and customization. Specify the effective date and amount of the forward starting swap to suit your company’s risk tolerance and interest rate expectations.

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Treasury Management

We offer a variety of treasury management solutions to help your company manage money during every stage of the cash flow cycle.

LEARN MORE about treasury management

Related Resources

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