- Ensures a hedge against rising interest rates.
- Is safe, allowing you to budget your loan servicing expenses when you know the minimum and maximum reference rates.
- Includes no separate fee for the interest rate hedge.
You can easily hedge your loans against rising reference rates. A corporate loan with an interest rate collar allows you to determine the minimum and maximum reference rates for an agreed period of time, giving you predictable loan servicing costs.
A rise in interest rates could have a material impact on the interest expenses of a loan. A corporate loan with an interest rate collar gives you a hedge in accordance with the agreed minimum and maximum reference rates. The interest paid on the loan consists of the reference rate, which will have a minimum and a maximum level for the duration of the interest rate collar, and the loan margin. You will pay no separate fee for the interest rate collar.