Interest rate hedge

If you have variable-rate funding, you may be interested in arranging an interest rate hedge that protects you from interest rate increases.

With interest rate hedges you can:

  • Cover yourself against the risks of unexpected rate hikes.
  • Know the financial costs of your financing in advance.
  • Protect yourself against market fluctuations.

CAP (Maximum Interest Rate Option)

With the CAP you can set the maximum cost of the Euribor. And therefore, you will know the maximum cost of your financing, in exchange for the payment of a premium. This coverage solution can be arranged by both natural and legal persons.

Thus, you will protect your financing against any rise in the interest rate above the maximum rate set at the beginning and for a specified period. During each period, if the interest rate exceeds that maximum rate, the Bank will offset the difference.

It is a flexible product both in terms of the amount to be covered and the period: CAPs are available for different periods. You choose the CAP that best suits you.

Coverage is parallel to the debt; therefore, it does not need to be taken out with the Bank. The CAP allows both new and existing debt to be covered.

Learn how the CAP allows you to protect yourself against interest rate changes in this video-tutorial:

IRS (Financial Interest Rate Swap)

With the IRS you can protect yourself against the interest rate increases of your variable rate financing by taking out this fixed rate coverage. This way, you can accurately determine your financial costs.

Taking out this coverage does not require the payment of a premium since the settlement is made periodically for the differences, and may or may not be to the customer’s benefit. In case of early cancellation, the product will be cancelled according to the market conditions and may lead to negative settlements for the Bank or for the customer.

This coverage solution is only available to certain legal entities that have new or existing debt as it is a specific product that is settled separately from the financing.

Reasons to place your trust in us

At Banco Santander we offer you the financial solutions that best adapt to managing the interest rate risks of your company, thanks to our wide range of products. We adapt to your business, whether small or large.

In addition, you will have a team of professionals in our network of branches available to advise you.

Shall we discuss it?

If you would like more information, visit any of our branch offices.


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