Interest Rate Risk Management

Reduce your exposure with interest rate risk management services.

Our customized interest rate management solutions can help appropriately hedge your firm’s interest rate risk, effectively reduce the cost of your enterprise's debt, and enhance your business’s ability to meet its targeted financial returns.

By working closely with you to identify and understand your investment, capital, and financing needs, as well as your business model, we can be a partner in managing market risks.

Customize your interest rate/expense and debt service requirements and help avoid unnecessary expenses.

Our capital markets interest rate management solutions allow you to effectively and efficiently customize your business’s cost of debt and the attendant cash flow requirement to align with your firm’s operating earnings and cash flow production. Doing so can help reduce financing costs, eliminate the need for premature refinancing of borrowings, and improve profitability and capital efficiency.

Using interest rate risk management can be beneficial in the following transactions:

• Acquisitions, new product or service capital investments, and market expansion.
• Leverage recapitalization, debt restructure, and conventional term debt refinancing.
• Hedging rate risk on planned future borrowings or issuance of debt securities (bonds or notes).

Fifth Third Bank’s customizable Interest Rate Management solutions include:

• Interest Rate Swaps—a customized contract between two parties to exchange a series of interest rates or payments. It allows a borrower to convert from a floating rate to a fixed rate (and vice versa).
• Interest Rate Caps—a customized contract that establishes a “ceiling” or maximum rate (cap strike) on a floating interest index for a specific term.
• Interest Rate Collar—a customized contract that combines an interest rate cap with an interest rate floor to establish a maximum range of movement for a floating interest rate index.