Interest Rate Protection

While borrowing money from a bank or other financier can seem relatively straightforward, the process actually involves quite a few details that seem trivial but can have lasting economic impact for an organization.  Banks tend to have different terms, spreads, conventions, and rate options.  Cardea Partners helps sort through the minutia to capture the apples-to-apples comparison that our clients really want.  In many cases, due to the size of the loan or the profile of the lender, a variable rate facility appears as the best or only viable financing solution. 

Having a variable rate loan adds a layer of uncertainty to the process for a borrower.  The direction of rates far into the future is unknown, and even the most informed of financial professionals will admit that their forecasts are often incorrect in hindsight.  As a manager whose primary objective in the business or organization encompasses budgets, revenue, or operations, certifying an opinion on market rates offers a daunting task and little benefit.

Despite the uncertainty of the market, Cardea Partners helps an organization analyze its position in its market, the factors that influence organizational forecasts and how those interact with market rates historically.  Crafting a unique and diverse rate strategy leaves managers feeling comfortable with financing decisions no matter where the market goes.  The suite of products for customizing interest rate strategy has significant breadth, with interest rate swaps, caps, and collars, or combinations with or without additional optionality all available to tailor a singular solution.

Next Application: Required Hedging