Other interest rate hedges

Hedging alternatives for different situations

The starting point for hedging interest rate risk is the determination of the company’s interest rate risk. In addition to traditional interest rate caps and floors as well as interest rate swaps, interest rate hedges can be tailored to each customer.

Besides the extent and nature of the risk, the selection of hedge is affected by expected interest rate movements and the market situation. Based on these considerations, special terms may be included in interest rate hedges which have an influence on the interest payable. Furthermore, there are contracts where the hedge for example changes into another type of hedge after a certain period of time.

How does your business benefit from hedging alternatives?

• Hedge can be adjusted with the interest rate risk.
• Market view and market situation are taken into account in hedging.
• Ability to hedge solely against a specific risk, resulting in a discount in the interest rate payable by the company.