Interest Rate Risk Management

Manage your interest rate risk with Webster’s proven protection tools.

  • Fast Facts
  • Transition to a fixed rate
  • Set limits on floating rates
  • Protect against rate changes

Interest rates can’t be predicted, but Webster helps you find ways to reduce, eliminate, or offset your interest rate exposure. Listed below are three of the most effective strategies to protect your business from the risks associated with floating-rate debt.

Webster’s Interest Rate Risk Management Offers

Interest Rate Swaps

Hedge the interest rate risk on your floating rate loan by entering into a swap, which fixes your rate and protects you from fluctuations in floating rates. Swaps offer flexible terms and two-way prepayment, allowing you to customize your borrowing to match your business plan projections.

Interest Rate Cap

Protect your debt from rising rates by purchasing an upfront cap on your floating rate. If your rate exceeds your cap, you’ll be reimbursed.

Interest Rate Collar

To offset some of the cost of your interest rate cap, you can instead enter into an interest rate collar, which is a combination of a cap and floor. By giving up the potential for the rate to fall below the floor, the premium cost of the cap is reduced, and the maximum rate is still capped.

For more details on Interest Rate Risk Management, please call us at 1-888-578-2323, or email treasurysales@websterbank.com.

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