Wachovia Corporate & Institutional - Interest Rate Risk Scenarios

Given the wide variety of financing and investment alternatives available today, companies may be experiencing interest rate exposure in many different forms. Below we describe four situations in which customers have significant exposure to interest rates. If one of these situations applies to you, we encourage you to contact us by clicking on the scenario that best fits your situation.

My company has a five-year floating rate loan priced at one month LIBOR. I am concerned that LIBOR will increase. Can I protect myself against LIBOR rising?

Almost all of my company’s debt is based on fixed rates. While we like the certainty of fixed rates, short-term rates are considerably lower today. What can we do to take advantage of lower floating rates?

We would like to hedge our floating rate exposure, but we may need to pay off our loan 12 months early. Is there a way to structure a hedge such that we could cancel it for no additional cost?

Our investments are sensitive to a decline in interest rates. In fact, we know that if the five-year Treasury drops 1.00%, we lose approximately $1 million dollars in revenue. How can we protect ourselves from this change in rates?

Wachovia Securities is the trade name for the corporate and investment banking services of Wachovia Corporation and its subsidiaries, including Wachovia Capital Markets, LLC ("WCM"), member FINRA/SIPC.

Debt and equity underwriting, trading, research and sales, loan syndications agent services, and corporate finance and M&A advisory services are offered by WCM.

Mezzanine capital, private equity, municipal securities trading and sales, cash management, credit, international, leasing and risk management products and services are offered by various non-broker dealer subsidiaries of Wachovia Corporation.

Interest Rate Risk Scenarios

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