Interest Rate Risk Management
What is it
Interest rate risk management aims to protect companies against volatility of interest rates (such as EURIBOR, SOFIBOR, LIBOR) , that their bank loan payments depend on.
This protection is achieved by ensuring:
- A fixed interest rate level for the entire loan period
- The maximum and/or minimum interest rate that provide a worst-case scenario with the option to take advantage of more favorable interest rate levels.
Advantages
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Up to 100% protection against fluctuations in interest rates
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Up to 100% predictability of future interest payments, cost of financing etc.
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Opportunity to use favourable market movements
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Customized products tailored to the client's exposure
Types of Instruments
UniCredit Bulbank offers a wide variety of derivative instruments tailored to needs of each client.
The main tools include:
- Interest rate swap
- Interest rate options - cap, floor, swaption
- Interest collar
- Tailored solutions
Whom is it Suitable for
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Companies with investing or revolving credit exposures based on the floating rate index
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All Corporate and Investment Banking clients