Financing Advisory Success
McGuire Sponsel reduces client’s interest cost on financing with bank
A nonprofit that provides programs of compassionate care and counsel for those in the Indianapolis community engaged McGuire Sponsel to assist with strategy, documentation and pricing of a lender mandated interest rate swap. The lender was requiring an interest rate swap to hedge against the rise of future interest rates. McGuire Sponsel worked closely with the nonprofit to develop a strategy for the swap and reduce the banks profit target.
During your next review or client contact, attempt to determine:
- The level of understanding management has of their existing swap transactions, including the current market value.
- What tools and resources management will use to determine the most appropriate hedging strategy and structure for current and future debt.
- Management’s opinion of the information and advice received before execution of existing interest rate swaps.
- Will management rely on their banking partners when determining how much debt should be hedged? How long will it be hedged? When to hedge?
- How does management ensure fair pricing for interest rate swap transactions? Is management able to quantify how much profit the bank has/is making on each swap transaction?
Can you benefit from our Derivative Advisory Service?
To find out if you or your client may benefit from our financing advisory services, complete and submit the form below. One of our derivatives professionals will contact you to complete a free evaluation.