Interest Rate Risk

Many companies resort to financing to support their business activity. From these debts contracts, of short term or long term, results an exposure to the risk of changes in interest rates on the money market.

Companies should have a strategy to address this risk, designing and implementing hedging strategies that are appropriate to the company profile, its activity and available tools.

IMF helps its clients studying strategies that are aimed to eliminate or reduce the interest rate risk underlying the debt of each company. We built tailor-made solutions and assist with their implementation, if required.

IMF monitors the operations of derivatives held by the company. For such purposes, valuations of the derivatives portfolio, usually on a monthly basis, are made using calculators and methods recognized by the market. More information about this service here.

Generally, the consultant services of IMF in money markets rely on some support components, adapting to the course of action requested by each company:

  • Profile analysis due to exposure to interest rate risk and joint definition of strategy and possible action plan. Development of strategies for managing interest rate risk, simple and structured products.
  • Support in the decision of Commercial Paper programs’ terms.
  • Information on financial markets: weekly reports about the behavior of the interbank money market in order to assist the company in formulating and implementing strategies to hedge the risk of interest rate. See examples here.
  • Reserved access to the page with interest rate of money markets and bonds.
  • Telephone line available to questions about financial markets that are relevant for the company.
  • Free training for clients in financial instruments and principles of market behavior.

Besides these global services to all clients, IMF also performs in accordance to each company by a personalized service, with:

  • Last minute reports - whenever there is any event likely to cause changes in the markets, last minute reports will be written, followed by an immediate phone call. All of this accordingly with the risk portfolio of each client.
  • Permanent surveillance of positions that may be suitable for hedging.
  • Attendance in hedging operations, if the client decides so, with the trading desks of national or international financial institutions with whom the company relates.





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