Geblitzt!: Read the current LPA Geistesblitz Fixed Income:
“Schuldschein-Darlehen” (promissory note loans) are the financing vehicle of recent years. Companies increasingly prefer it as a form of financing over bank loans or corporate bonds. Thus, the 129 transactions placed in 2016 marked a new record of the yearly total amount issued of around EUR 25.8 billion. If they carry a fixed rate this can lead to significant deviations from the interest rate mix companies pursue.
The current issue “Variabilisation of a Schuldschein-Darlehen using an in-arrears swap with cap” shows your clients the opportunity to change interest rate payments partly to variable payments and thus reach the desired interest rate mix again. The illustrated solution is exemplary. It may be applied to any form of fixed-rate financing, whether it is an SSD, a corporate bond, a promotional loan or a classic fixed-rate credit.
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