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Our pledge to companies

Strategies with options

Strategies with options

The combination of options allows us to design a strategy tailor made to your needs.

We show you some examples that will be useful to you if your company has financing (loan, mortgage, leasing, credit facility, etc.):

  • KO Swap
  • Range Swap
  • KIKO Collar

1. KO Swap


If your company has financing, by means of a KO swap you can eliminate the fluctuations of interest rates, provided that certain conditions are fulfilled (that the interest rate is below a level established beforehand known as KO barrier).

At the maturity of each period, the client:

  • Pays the stipulated variable rate (EURIBOR 3 months, for example)
  • Receives a rate agreed with the strategy:
    • if variable rate < barrier: fixed rate
    • if barrier < variable rate: variable rate

Gráfico

The KO swap is settled by offset. The incorporation of conditions allows improvement of the fixed rate in comparison with a conventional swap.

2. Range Swap


If your company has financing, by means of a range swap you can reduce the fluctuations of interest rates to two fixed levels (subsidised fixed rate and penalised fixed rate) so that the variable rate is situated within a range.

On maturity of every period:

  • You pay the stipulated variable rate (EURIBOR 3 months, for example)
  • You receive a rate agreed with the strategy:
    • if variable rate < lower barrier: penalised rate
    • if lower barrier < variable rate < upper barrier: subsidised rate
    • if upper barrier < variable rate: penalised rate

Gráfico2

The range swap is settled by offset. The incorporation of a range allows you to establish a level of subsidised fixed rate compared with a conventional swap

3. Collar KIKO


If your company has financing, by means of a KIKO collar you can eliminate the fluctuations of interest rates (fixed rate) below a certain level (KO barrier), and also, make good use of favourable movements of the same up to another level (KI barrier).

On maturity of every period:

  • Pays the variable rate stipulated (EURIBOR 3 months, for example)
  • Receives a rate in agreement with the strategy:
    • if variable rate < KI barrier: fixed rate
    • if KI barrier < variable rate < fixed rate: variable rate
    • if fixed rate < variable rate < KO barrier: fixed rate
    • if KO barrier < variable rate: variable rate

Gráfico3

The KIKO collar is settled by offset. The introduction of a KI barrier enables the client to make good use of reductions of the interest rate up to the said level. The introduction of a KO barrier allows improvement of the level of the fixed rate.

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