Interest Rate Protection

There's more than one kind of risk.

Learn about our interest rate risk management services.

Interest Rate Protection

For over a decade, Bank of the West's Capital Markets team has helped our customers maximize growth and mitigate risk. Our seasoned professionals use a collaborative approach, which allows us to make recommendations consistent with your needs and objectives. We focus on your needs so that we can tailor interest rate strategies to your unique business and operating conditions. 

Interest Rate Protection can help you: 

  • remove uncertainty about future interest rate changes, loan refinancing, or new borrowings 
  • secure two-way valuation characteristics during early payoffs 
  • utilize the unparalleled structuring flexibility of derivatives 
  • manage the interest rate risk of substantial borrowings 
  • take advantage of the potential 'portability' of your derivative 
  • secure multi-year rate hedges on 1-year operating lines 
  • lock-in long-term rates when rates are low 
  • rebalance your fixed and floating rate debt percentages 

Interest Rate Management Tools to Help Minimize Risk 

  • Swap: synthetically "fix" the interest rate of a variable rate borrowing 
  • Cap: pay an upfront premium to "insure" against a variable interest rate moving above a predetermined (strike) rate 
  • Collar: provides secure rate protection to ensure that the variable interest rate never exceeds nor goes below two different pre-determined interest rates, typically without any upfront costs 
  • Forward Rate Agreement: establish a contract between two parties to fix an interest rate and apply it to an agreed-upon notional principal amount on a fixed future date for a specified period. The amount paid or received is the difference between the market index and the calculated baseline rate. 
  • Other products: customized hedging transactions such as Treasury Locks, Swaptions, Percent of LIBOR, and Floors.