Managing interest rates exposures, reduce funding cost
Interest rates movements have an impact on your rates exposures or cost of doing business in this highly competitive business operating environment.
At Treasury & Markets, we can assist you in the management of your business’s rates exposure through the various risk management products ranging from vanilla interest rate swaps and cross currency swaps to other customized derivatives embedded solutions including interest rate caps, collars, swaptions, etc.
|Range of FX Products Offered
Interest Rate Swap (IRS)
An IRS transaction is an agreement between two parties to exchange interest rate payments, based on a notional amount, over a certain period of time. It allows the flexibility of converting a fixed rate asset/liability to a floating rate asset/liability and vice versa.
Cross Currency Swap (CCS)
A forward FX contract is a binding obligation where you and the Bank agree to the delivery that takes place more than 2 working days after the transaction date. There are two types of Forward FX Contract:
(a) Fixed Forward FX – delivery of contract takes place on a particular fixed date after Spot day
(b) Window Forward FX – delivery of contract takes place within a particular period after Spot day before maturity
Forward FX Contracts are generally used to offset or hedge against future FX rates exposure on receivables/ payables in different currencies.
An Interest Rate Swap with Cap (“IRS with Cap”) is an exchange of interest payment flows with a cap that places a ceiling on the floating rate interest payable. It involves two parties contracting to swap respective fixed and floating rate interest payments over a specific period. Where the reference rate for the floating rate interest payments exceeds the cap rate, the floating rate interest payments will be restricted to the cap rate. The notional principal amount of an IRS with Cap is used to calculate the periodic interest payments only and is not exchanged.
A Cross Currency Interest Rate Swap with Cap (“CCS with Cap”) is an agreement between two parties to exchange principal and/or interest in different currencies over a specific period with a cap that places a ceiling on the floating rate interest received by you. A CCS with Cap may be used as part of an interest rate and foreign exchange risk management strategy as it enables fixed rate interest payments in one currency to be swapped for capped floating rate interest receipts in a different currency. A CCS with Cap may involve exchange of principals in different currencies.