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Interest Rate Swap

Introduction

A financial product that borrowers can do to swap interest rate payment from fixed to floating, or vice versa. IRS is a derivative instrument and trades over the counter.

Features

Interest Rate Swap can hedge interest rate risk, and helps the clients to reduce funding costs, as well as provide stability of cash in/outflows for operations.

Target Customers

Clients who have the need to hedge their interest rate risk: companies with loans with fixed or floating interest rate

Process

1. Clients need to sign an ISDA (International Swaps and Derivatives Agreement) with the bank.

2. Client initiates an order with trading details and IRS rates in written form.

3. After the deal is confirmed by the client and the bank, payments from both sides are expected to be realized according to the predetermined rates (floating and fixed).

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