Interest Rate Risk Management


Corporate Rate Risk Management

Fluctuating markets can impact your business’s bottom line – suddenly and unexpectedly.

In today’s marketplace, interest rate volatility and the uncertain cost of future borrowings have made interest rate risk management an important tool for lenders. Our Corporate Rate Risk Management group focuses exclusively on the market-related risk management needs of our customers.

We develop and implement hedging solutions that minimize or eliminate risks related to the movement of interest rates. This allows customers the financial freedom to focus their efforts on running their business – instead of on the direction of interest rates.

Products offered (minimum of $500,000)

Interest Rate Swaps

  • An interest rate swap is a contractual agreement between two parties to exchange interest payments on set dates in the future. The most common type of swap – called a “plain vanilla” swap – involves one party, the fixed rate payer, making fixed payments, and the other party, the floating rate payer, making payments which depend on the floating interest rate index.

Interest Rate Caps

  • Limits impact of a dramatic rate increase by placing a maximum value on a floating interest rate.
  • Allows the customer to take advantage of low short-term interest rates.

Interest Rate Collars

  • Collar buyer purchases a cap to limit the maximum interest rate to be paid, then sells a floor to obtain a premium to offset all or part of the cap costs.
  • With a collar the customer forgoes any benefits associated with a decrease in rates below an established floor level.
  • Customer floats within an interest rate band.


  • Effectively manage or eliminate interest rate risk
  • Provides tremendous flexibility over traditional fixed rate financing
  • Two-way prepayment penalty, providing the customer with a benefit if rates increase
  • Detailed reporting provided online, via fax, email or U.S. mail.

For more information, contact Corporate Rate Risk Management /Corporate Derivatives at 1-800-833-2706, Monday to Friday, 8:00 a.m. to 5:00 p.m. ET.

Companion services include:

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