Interest Rate Hedging & Money Market Solutions

An Interest Rate Swap allows you to convert floating rate borrowing into a fixed rate (or vice versa), giving you predictability over your interest costs and greater cash flow certainty.

In practice, you agree to exchange your floating reference rate payments (E.g. Euribor, ESTR, SONIA or SOFR) for fixed rate payments over a pre-agreed notional schedule and tenor. This way you will not be impacted if floating rates rise, but you won't be able to benefit if floating rates drop either.

If you have (or expect to have) a floating rate loan and want to protect yourself against rising interest rates, an Interest Rate Cap can be a suitable solution.

An Interest Rate Cap is an option on a maximum floating reference rate. By paying an upfront premium, you set a maximum interest rate (the cap strike) for a defined period. If the floating reference rate rises above this level, the cap provides compensation above the strike level. At the same time, you will benefit if rates stay below the cap strike or if they will drop lower.

An Interest Rate Floor is typically used when you are exposed to floating interest rates on investments, such as money market deposits, and want to protect against falling floating rates. In exchange for a premium, you secure a minimum interest rate level for a set period. If the underlying floating rate drops below this level, the floor provides compensation.

A swaption gives you the right, but not the obligation, to enter into a pre-agreed Interest Rate Swap at a future date. By paying a one-off premium upfront, the buyer secures the option to pay or receive a fixed rate in exchange for a floating reference rate, over the swap’s term.

An Interest Rate Collar combines an Interest Rate Cap and an Interest Rate Floor to hedge future interest rate exposure, often with little or no net premium. Strike levels are typically set so that the structure is premium neutral, although combinations with a net premium are also possible.

If the reference rate remains within the agreed range, no payments are exchanged. If the rate moves above the Cap or below the Floor, the difference is settled accordingly.

A Cross Currency Swap can help meet fixed-income commitments in a different currency while managing FX and interest rate risks. Under this agreement, two parties exchange interest payments, and potentially principal amounts, in different currencies over a set period, which may be fixed or floating for either party.

Deal contingent hedging is a tailored risk management solution for situations where your exposure to interest rate movements depends on a future transaction such as an acquisition, divestment, refinancing or capital raise.

With a deal contingent hedge, for example a deal contingent interest rate swap, the key commercial terms are agreed upfront. However, the hedge only comes into effect if the underlying transaction successfully completes. If the deal closes as planned, the hedge activates and provides protection against adverse movements in interest rates. If the transaction falls through, the hedge will be cancelled, meaning you are not left with any obligations under the swap.

This approach allows you to lock in interest rate certainty during critical stages of a transaction, such as negotiations, regulatory approvals or due diligence, when market volatility can have a real impact on financing costs. At the same time, it ensures you avoid the risk of putting a hedge in place that is no longer needed if the deal does not go ahead.

Our Money Market Deposits help you put surplus liquidity to work in a straightforward and efficient way. We offer competitive rates across a wide range of currencies, for both short- and longer-term placements. You can place and manage deposits at any time via our online platform, Dealstation, giving you direct control over your cash positions. If you’re looking to enhance returns further, you may also want to explore our Structured Deposits solutions.

A Dual Currency Deposit is a structured solution designed to enhance yield by introducing foreign exchange exposure. You place funds in one currency and agree that, at maturity, the repayment may be made either in the original currency or in an alternative currency at a pre-agreed exchange rate.

In return for taking on this FX risk, the interest rate is fixed upfront and is typically higher than that of a standard money market deposit.

This type of deposit can be particularly suitable if you regularly transact in foreign currencies and are comfortable with potential currency conversion at maturity.

A Tower Deposit is a principal-protected, FX-linked structured deposit that offers the opportunity to earn an enhanced return, depending on how a selected currency pair performs within a predefined range.

At the outset, you agree on the reference currency pair (for example EUR/USD), the relevant range, and both a higher and lower interest rate. Throughout the investment period, the exchange rate is monitored continuously.

If market conditions remain stable within the agreed range, you benefit from an attractive higher return. If the range is breached, a predefined lower rate applies, ensuring you still receive a known minimum return.

A Range Deposit is a principal-protected structured solution that can deliver a higher return than a traditional money market deposit, provided interest rates remain within a specified range over time. Before entering into the deposit, you agree on key parameters such as the reference rate (for example 1-month EURIBOR), the minimum interest rate, the range (bandwidth), and the fixing dates. On each fixing date, the reference rate is checked against the agreed range.

Your potential return depends on how often the rate stays within that range, with the final terms determined based on the chosen period, range, and minimum rate.