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