Insolvent and Interest rate guarantee: Difference between pages

Latest revision as of 13:53, 9 October 2013

(IRG).

This is an option on a specified short-term interest rate for a specified notional loan or deposit.

A borrower normally wants a guarantee that their hedged rate payable will be 'no higher than' a specified worst case rate.

A lender or investor normally wants a guarantee that their hedged rate receivable will be 'no less than' a specified worst case rate.

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-.
+(IRG).
-Unable to pay financial obligations as they fall due.
+This is an option on a specified short-term interest rate for a specified notional loan or deposit.
+A borrower normally wants a guarantee that their hedged rate payable will be 'no higher than' a specified worst case rate.
+A lender or investor normally wants a guarantee that their hedged rate receivable will be 'no less than' a specified worst case rate.
-.
-''UK law''.
-A company is insolvent when it is unable - on a balance of probabilities - to meet all of its existing, prospective and contingent liabilities, taking account of future costs and of future interest obligations.
 == See also ==
-* [[Balance sheet insolvent]]
+* [[Hedging]]
-* [[Cash flow insolvent]]
+* [[Interest rate]]
-* [[Insolvency]]
+* [[Interest rate option]]
-* [[Solvency]]
+* [[Option]]
-===Other links===
+[[Category:Manage_risks]]
-[http://www.treasurers.org/node/7102 Issues around insolvency of your own firm, Will Spinney, 2011]