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While banks are due a fee when booking a swap to cover the element of risk, the borrower should be represented so that he may competently negotiate a reasonable price and then have access to live market data, which insures that the contract is concluded in accordance with negotiation. Take a look at how we have helped other commercial borrowers save hundreds of thousands of dollars in some of these interest rate swap examples!
Borrower’s bank had quoted borrower and “indicative all-in fixed rate” of 5.15% for 5 years on a $9,000,000 loan.
The borrower experienced a decrease in income causing a strain on cash flow…
The borrower had been offered an improved loan spread from a competing bank that would lower its interest cost by nearly $500,000 over 5 years.
The lending bank required the borrower to purchase a cap to hedge a $19MM floating rate term loan…