Interest Rate Risk Management

Webster’s customizable solutions can help protect your company’s assets from costly increases in interest rates.

  • 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
If you have a floating rate loan, entering into a swap will fix your rate and protect you from future increases. Swaps offer flexible payment terms as well as 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—a maximum potential rate—on your floating rate. If your rate exceeds the cap, you’ll be reimbursed.

Interest Rate Collar
A less expensive alternative to a cap is an interest rate collar, which is a combination of a cap and floor. That means your rate will not go above a maximum cap amount or below a minimum floor amount.

By giving up the potential advantage of your rate falling below the floor amount, the premium cost of the cap is reduced.

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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