Who is it for?

Domestic and foreign corporate clients

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Home and foreign corporate clients who want to insure financial investments against big changes of interest rates.
Key advantage

Set highest interest rate

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Highest interest rate fixed in advance for the whole duration of insurance.
Possibilities of choice

Various funding instruments

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Choose among various funding instruments.

Changes in interest rates can have a significant impact on the costs of financing. By using interest rate risk instruments, you can ensure stable financing conditions and thus more stable operating conditions.

SKB Bank offers you several instruments that can protect you against interest rate risk, and combinations of individual instruments are also possible. We will always offer you a solution tailored to your borrowing conditions.

Conditions for taking out insurance:

  • Signing of the Fundamental contract on transactions with derivatives.
  • Valid LEI number.
  • Signing of the Reporting arrangement (the EMIR regulation).
  • Approved overdraft limit for entering into derivatives.

Different financial instruments

Interest rate collar

An interest rate collar is a combination of the purchase of an interest rate cap and a simultaneous sale of the interest rate floor with the same characteristics as with the interest rate cap (nominal amount, reference interest rate, maturity).

With such a combination, the buyer can partly or entirely avoid the payment of the premium required for the purchase of an interest rate cap. The premium of the interest rate cap is reduced by the premium the buyer of the interest rate collar receives for the sale of the interest rate floor.

Interest rate swap

 

An interest rate swap is an agreement between the bank and the company on the swap of interest payments in the same currency, either at a fixed interest rate for obligations at a floating rate, or vice versa.

Applying this instrument, companies which normally borrow at a floating rate swap for the entire duration of financing/loan the reference interest rate (Euribor, Libor, etc.) for the fixed interest rate specified at the conclusion of the transaction.

It protects you against interest rate changes that are unfavorable for you as this instrument secures fixed financing costs.

Advantages:

  • You enjoy full protection against an adverse change in interest rate.
  • You can secure a fixed/known interest rate for the entire duration of financing.
  • No additional costs.

Disadvantages:

  • You do not gain in the event of a favorable change in interest rates.

Interest rate floor

An interest rate floor is an instrument hedging the option buyer against the falling of interest rates below the interest rate fixed at the time of trading (the strike interest rate).

The buyer of the interest rate option has the right to use the option in the case of an interest rate movement that is unfavorable for them and is obliged to pay the bank a premium for this right.

Advantages:

  • You enjoy full protection against an adverse change in interest rate.
  • The company itself determines the strike interest rate.
  • The company gains in the event of a favorable change in interest rates.

Disadvantages:

  • Payment of a premium.

Interest rate cap

An interest rate cap is an instrument hedging the option buyer against the rising of an interest rate above the interest rate fixed at the time of trading (the strike interest rate).

Treasury Sector

Employees in the Treasury Sector will be glad to provide any additional information or clarifications.


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In accordance with the Decision of the Bank of Slovenia No: 38.20-0005/18 of 04 January 2018 on granting an authorization for the exemption of intra-group transactions from the obligation to exchange collateral according to the EU regulations EMIR, SKB banka d.d. Ljubljana (SKB Bank) applies the entire exemption as regards the exchange of collateral in transactions with OTC derivatives (IFI) with the counterparty Societe Generale S.A., Paris (SG Paris) - intra-group transactions. SKB Bank (LEI Identifier: 549300H7CCQ6BSQBGG72) and SG Paris (LEI Identifier: O2RNE8IBXP4R0TD8PU41) are part of the same Societe Generale Group and both financial counterparties based in different EU Member States. The nominal total amount of agreements on OTC derivatives that are subject to an exemption within the group amounts to EUR 2.5 billion.

Documents under the PRIIP regulation

Get acquainted with documents including key information for retail investors concerning derivatives of SKB Bank d.d. Ljubljana, which are traded with outside stock exchanges (OTC). Documents are not marketing material.

If you wish, we will, at your request and free of charge, provide you with the requested document including key information in printed form.

Treasury Sector

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