個案資料
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Columbia River Pulp Company Inc. - Interest Rate Hedging Strategy
內容大綱
A positive covenant on a $200 MM floating rate loan required Columbia River Pulp (CRP) to hedge a minimum of $100 MM for at least three years at a maximum rate of 12 percent. The alternatives included interest rate SWAPs, CAPs and COLLARs. What is the optimal hedging structure? Should CRP hedge all of its floating rate debt, or only the amount required under the loan agreement? (This case can be used with two related cases bearing the same name, 9A95B034 and 9A90B036. A Microsoft Excel spreadsheet is available for use with this case, product 7A90B037.)
學習目標
The objectives of this case are to introduce: interest rate risk management through the use of the financial markets; interest rate derivatives: SWAPs, CAPs and COLLARs; interest rate conventions: LIBOR, Prime, U.S., Canada, Euro.