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Interest Rate Swap (IRS)
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Protect your business against interest rate volatility.
An agreement/ contract to swap your interest payment exposure from floating rate into fixed rate.
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Convert your floating (interest) rate debt or investment into a fixed rate one (or vice versa).
Ideal for customers with floating rate loan and would like to hedge against interest rate rise.
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Convert a fixed interest rate into a floating rate- When investing in bonds or debentures whose returns are uncertain while expecting that interest rates are likely to rise, changing the interest rate will likely allow you to get higher returns as well
- When you have fixed interest payments but expect that a floating rate is likely to fall, switching to a floating rate of interest will allow the possibility of paying less interest
Changing a floating interest rate into a fixed rate When you need to know your exact costs or expect that a floating interest rate is likely to rise, changing the interest rate to a fixed one will allow the possibility of paying less interest
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Pay only the difference.
The interest payable and receivable is calculated and the payment will be net coincide with each interest payment date (as defined in the contract).
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Service Details
| Changing a floating interest rate into a fixed interest rate |
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- When you have floating rate loan and expect that the interest rate is likely to rise, switching to fixed rate will eliminate your interest rate risk.
- When investing in floating rate bond while expecting that the interest rate is likely to fall, swapping to fixed rate will allow you to enjoy higher returns if your view is correct (interest rate falls).
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| Convert a fixed interest rate into a floating interest rate |
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- When you have fixed rate loan and expect that the interest rate is likely to fall, switching to a floating rate will allow you to enjoy a lower interest if interest rate falls.
- When investing in fixed rate bond while expecting that the interest rate is likely to rise, swapping to floating rate will allow you to enjoy higher returns if interest rate rises.
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Frequently Asked Questions
What is underlying ?
According to Bank of Thailand (BoT) regulations, a seller or buyer of foreign currency must have an underlying obligation such as invoices for goods and services, loan agreement. However, customers must present evidence to the bank on the date of purchase.
What floating interest rate benchmark can KBank offer in IRS ?
KBank can offer all market benchmarks such as THOR, MLR, SOFR, EURIBOR, JPY TONA, etc. For further detail please contact your Relationship Manager (RM) or K-BIZ Contact Center at 02-888-8822.
Which currencies are available in IRS ?
KBank supports all tradable currencies in IRS market such as THB, CNH, SGD, USD, EUR, JPY, GBP, AUD, CAD, etc.
Can IRS protect 100% against interest rate fluctuation risk ?
IRS is just a financial contract that effectively changes (swaps) your interest rate exposure from floating into fixed (or vice versa). How well your interest rate risk is eliminated depends on how well the IRS matches your underlying business. For further detail please contact your Relationship Manager (RM) or K-BIZ Contact Center at 02-888-8822.
Do I need to have underlying loan and/or investment with KBank to do IRS with KBank ?
No, you don’t need to. For further detail please contact K-BIZ Contact Center at 02-888-8822 or your Relationship Manager (RM).
I am interested to know more about Interest Rate Swap (IRS), who should I contact ?
For further detail please contact your Relationship Manager (RM) or K-BIZ Contact Center at 02-888-8822.
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