Next
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Once you’ve classified the debt as core, and it meets the other two main considerations – size and time to maturity – you can ask your client two simple questions to identify if they would benefit from an Interest Rate Risk Management conversation.

Are there any acquisition, divestment or succession plans that could affect revenue streams and banking covenants? If significant plans are in place, a conversation with a Global Markets specialist regarding Interest rate risk management becomes very important.


The greater the need for interest cost certainty to protect profit margins, the more important Interest Rate Risk Management becomes. If a client is unsure about how their interest costs may be affected as a result of interest rate fluctuations, a Global Markets specialist can assist them. Lending covenants (such as Interest Coverage Ratios) and future shareholder (or investor) returns are among other factors that need to be taken into consideration.


If the answers to the two follow-up questions indicate that the client would benefit from an Interest Rate Risk Management conversation, then the best course of action is to refer to your Global Markets Specialist as early as possible.
More specifically if a client is:
New to Bank: Refer when you are preparing a new debt proposal; the Global Markets team can meet with New to Bank prospects with you and assist in meeting client needs.
An existing client changing facilities or extending term: Refer when you or your client initiate refinance discussions or a business review.
An existing client when you’re reviewing their portfolio: Contact Global Markets and discuss potential opportunities that are: core debt, with an amount that is more than $500,000, and have more than 18 months left to maturity.