Risk Participation Agreement

  • Usually utilized by banks not offering derivatives directly to their customer but on a one-off basis, as a customer demands

  • Huntington partners with your bank to sell the interest rate swap to the customer

  • Your bank assumes the credit risk of its customer from Huntington through a Risk Participation Agreement

  • Your bank is paid a fee to assume this credit risk

  • Amortize fee income over the life of the guarantee

 

Customer Hedges Floating-Rate Loan

Customer hedges floating-rate loan

Learn More about Derivative Solutions for Financial Institutions