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

  • Up to 100% protection against fluctuations in interest rates

  • Up to 100% predictability of future interest payments, cost of financing etc.

  • Opportunity to use favourable market movements

  • 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

  • Companies with investing or revolving credit exposures based on the floating rate index

  • All Corporate and Investment Banking clients

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