Interest Rate Hedging

  • interest rate swapinterest rate swap

    A hedging strategy to protect against interest rate risks

Features & Benefits

UOB offers a range of interest rate hedging solutions to help you better manage your floating rate loan obligations

  • A hedging instrument for corporate to protect against rising interest rate risk.
  • An IRS is an agreement between two parties to exchange interest payments, based on a nominal principal, over a certain period of time. One party will pay a floating rate and the other party will pay a fixed rate. No exchange of notional amount, only exchange of interest payments.
  • Tenor of IRS ranges from 1 to 30 years.
  • Suitable for corporate with floating rate loans/liabilities.
  • Allows corporate to convert its floating rate loan into a synthetic fixed rate loan, thus having certainty on interest costs.
  • Available in different currencies (for example, SGD, USD, EUR, AUD, JPY, etc) and available to hedge against different floating rate interest rate indices (for example, SGD Swap Offer Rate, USD Libor, EURIBOR, etc).
  • A hedging instrument for corporate to protect against rising interest rate risk, and yet enjoy from low interest rates.
  • The buyer of an interest rate cap pays a premium to the bank. In return, the bank pays a periodic payment based upon the positive amount by which the floating rate interest index exceeds the specified cap rate.
  • This interest rate cap can be viewed as an insurance, ensuring that the maximum borrowing rate does not exceed the specified cap level.
  • A hedging instrument for corporate to protect against rising foreign exchange risk and/or interest rate risk.
  • Cross currency swap is an agreement to exchange interest and principal payments in one currency for those denominated in another currency.
  • Suitable for corporate with loans denominated in one currency while its assets or revenue are denominated in a different currency.
  • Allows corporate to convert its loan from one currency into another currency with fixed/floating interest rate.
  • Available in different currency pairs (for example, USD/SGD, USD/JPY, EUR/SGD, etc) and available to hedge against different floating rate interest rate indices.

 

We also offer a variety of other interest rate hedging products to better manage your interest rate exposures.

 

Apply Now

To apply, all institutions have to set up an IRS Line with the Bank. The IRS line states the maximum amount and tenor that you may contract at any one time.

More Information

Visit us at:

United Overseas Bank Limited

Global Markets Sales

80 Raffles Place

5th Storey UOB Plaza 1

Singapore 048624