Is your bank requiring a swap on your loan?

Do you want a swap?

How do you know you’re getting a good rate?

Interest Rate Swaps and Caps can be useful tools to reduce or eliminate interest rate risk but… in order to use these tools effectively a borrower needs good advice to choose the right type and then negotiate attractive terms and competitive pricing.

Your bank has a conflict of interest
Banks have an incentive to recommend the most expensive (biggest and longest) swap for every situation, regardless of whether that makes the most sense for the borrower.  The bank may even try to force you to enter into a swap on your loan. But before accepting a swap as a given, contact us to help you negotiate more favorable terms for your loan. There is absolutely no cost for you to call us. In fact, not calling us may cost you in the long run.

DAG helps clients minimize hidden profits for the bank
We’ll help you decide whether you need a swap, and if you do, help you choose the right swap, and not just the one that makes the bank the most money.  We analyze the economic environment and the interest rate markets to determine the optimal “hedge” to fit your needs.  Then we’ll help you negotiate and execute the best pricing and terms from your bank, or we’ll find you a better deal elsewhere.

As Little as a 0.01% Reduction in your Rate will result in Thousands of Dollars of Interest Savings!
Swaps have hidden fees built into them which are big money-makers for banks.  A bank’s profit on a swap will be multiples of your loan fee!  As little as a 0.01% reduction in your rate will save you thousands of dollars in interest!  Every time a borrower enters into, terminates, modifies or transfers a swap, there is a built-in profit to the bank.  DAG’s pricing systems and swap expertise help you minimize your fees and the bank’s profit…putting more money back into your pocket.

Here’s just one example from our client case studies: DAG was able to source the interest rate cap portion of the hedge for a lower cost than the client’s bank would sell it. DAG was also successful in negotiating a lower rate on the swap portion of the hedge.

DAG’s assistance resulted in the following savings to the client:
Savings of .30% lower rate on the loan: $169,500
Savings on price of the cap: $50,000
Savings on rate (.05%) of the swap: $28,250
Future expected variable rate savings: $158,000

Savings to Client:

$405,750

(5.00% of loan value)

 

 

 

 

 

 

Contact us to learn how DAG can help you with:

Negotiating Loan Terms Requiring a Swap

Determining the Right Hedge for your Loan

Negotiating Terms for a Swap (or a Cap)

Terminating a Swap

Modifying a Swap

Transferring a Swap

DAG is an independent, financial advisor serving the corporate, non-profit, tax-exempt and municipal debt markets.  We guide borrowers in the use of interest rate hedging products. We work to get you the best deal with the best terms. You have nothing to lose, and may even recoup some of the fees you are currently paying your bank.  Call us for a no obligation consultation today!