Interest Rate Management Program Example
Asset Valuation:
- We have the ability to price both loans and bonds for our clients, utilizing the latest market information.
- Our financial engineers suggest hedging solutions to manage our clients’ interest rate risk on their future cash flows. For example, purchasing a floor to protect floating rate payments on an asset in a low interest rate environment.
- Using our resources, clients get competitive execution on asset purchases.
- Analyses are presented in a clean, easy-to-read format.
Client was purchasing an asset for its debt fund. Client had negotiated the terms, but needed assurance the dollar amounts were correct and the swap rates client traded on were accurate.
Solution:
Custom Hedging Solutions analyzed the cash flows of the loan and the terms of the purchase agreement, looked for ways to add value through implementation of standard conventions, checked swap rates, and valued the asset for the client. Additionally, our hedging strategists looked for asset-liability mismatches that would leave the client exposed to unnecessary interest rate risk.
Debt Analysis Risk Analysis and Solutions