Interest rate risk hedging instruments from Btoken Bank
Hedging interest rate risks allows the company to avoid financial losses or significantly reduce them in case of adverse changes in interest rates. Btoken Bank offers hedging instruments in currencies such as US dollar (USD), euro (EUR), Russian ruble (RUB) and more than 20 popular currencies.
To conclude a transaction, you must have a contract and the bank setting limits for urgent transactions
Hedging is carried out for up to 10 years and depends on market liquidity.
Our tools
IRS (Interest Rate Swap) or Interest Rate Swap
It ensures interest rate stability throughout the loan repayment period. An interest rate swap is a transaction during which there is an exchange of cash flows derived from a floating or fixed interest rate. The main advantages of the IRS are:
- - Decrease in the initial interest rate on the loan due to the growing interest rate;
- - the possibility of concluding individual agreements on the payment of early contributions.
Set-up IRS or rising interest rate swap
If you compare the Set-up IRS and the classic interest rate swap, then in the first case, the interest rate will be lower. However, over time, it will gradually increase. This hedging tool allows you to reduce the down payment on loan repayment. Please note that the Set-up IRS does not allow you to make a profit with a favorable change in the interest rate.
Interest Option or Interest Option
An interest option allows you to receive income subject to a favorable change in rates. It entitles the buyer to replace the agreed fixed interest rate and the floating reference interest rate. Please note that the purchase of an option entails immediate costs for the buyer to pay a premium to the seller for the right to replace the rate.