INTEREST RATE COLLAR - SLIDE 1

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An Interest Rate Collar limits a floating interest rate to a predetermined range. Under a collar, a customer purchases a cap to limit its interest expense to a known maximum. To offset the cost of the cap, the customer sells Wachovia a floor under which the customer must relinquish the benefits of floating rates declining below a floor level.

BENEFITS

Minimal to Zero Cost
A collar can be designed with no up-front payment while providing the same protection against rising interest rates as an interest rate cap.

Reduced Unwind Costs
The magnitude of any costs for unwinding the collar would be smaller than those associated with unwinding a fixed rate hedge on the same size and maturity.

Flexibility
Subject to approval, customers can enter into a interest rate collar at any time, for any term, on any portion of their variable rate debt.