Corporate loan with an interest rate cap
Would you like to protect against a rise interest rates while capitalising on low interest rates? Include an interest rate cap in your company's loan and you will ensure that your borrowing rate will not rise above the agreed level.
The interest rate cap sets a maximum rate for the varying reference interest rate applied to your loan. This is how make sure that your company's loan interest expenses will not rise above the agreed level. The total borrowing rate consists of the reference rate limited to a specific ceiling plus the markup. When the loan reference interest rate is below the agreed ceiling, the loan behaves like a standard floating rate loan, which means that your company benefits from the prevailing interest rates and any possible fall in interest rates.
The interest rate cap can be included in your company's new or existing loan with a cap and for a period of your choice. The loan must be linked to a Euribor rate but the repayment method is flexible. The cost of the interest rate cap is determined by the level of the cap, duration, bond-market conditions and principal. The interest rate cap premium is deductible in business income taxation. You may repay early your loan with an interest rate cap without any extra charges.
Loan with an interest rate corridor
Would you like to improve the predictability of your company's interest expenses? If you say yes, include an interest rate corridor in your loan. By means of the interest rate corridor, you can fix interest expenses for future years or set them a certain range of variation.
Designed for OP's corporate and institutional customers, loans with an interest rate corridor is a loan providing protection against rising interest rates. The loan is protected against a rise in interest rates through the interest rate corridor. The interest rate corridor is a combination of an interest rate cap and floor, which sets maximum and minimum levels for the reference rate of floating-rate loans. The reference interest rate applied to the loan with an interest rate corridor will not rise above the cap and at the same time you will benefit from a possible decrease in interest rates down to the floor. It is also possible to set the interest caps and floors at the same level in which case the floating rate loan becomes a fixed-rate one. This is how you will know in advance the amount of your company's future interest expenses. Total interest on the loan with an interest rate corridor is based on the abovementioned reference rate plus the agreed markup.
The interest rate corridor can be included in your company's new or existing loan for a period of your choice. The loan must be linked to a Euribor rate and repayments are made on an equal payment or interest-only basis. The interest rate corridor follows the loan terms and conditions and no changes to them may be made during the corridor's duration. Establishing an interest rate corridor is not subject to a charge but cancelling it during its validity may incur costs.