The cost of debt is one of the primary concerns of any company with debt. Having debt at ‘floating’ rates (Base Rate or LIBOR) can lead to increased costs, debt covenant breaches and additional volatility in the Income Statement/Cash Flow of the business. Hence, firms often ‘hedge’ part of their debt as part of overall Risk Management, in order to protect themselves from rising interest rates. We can help to make Interest Rate Swaps, Caps, Collars and several other related products part of your hedging strategy, significantly reducing the cost of your debt.
The hedging process can appear daunting and complex if the management has not undertaken hedging previously. Vedanta Hedging can help you review and understand banks’ hedging proposals. This is achieved through using our detailed working knowledge and experience of these instruments, as well as the same ‘market-fed’ pricing tools used by the banks.
Vedanta Hedging can assist at all stages of the process and can also advise you on other interest rate hedging strategies that may be more suitable for your specific situation.
Crucially, we will help to ensure that the banks do not make excessive ‘hidden’ profits on the interest rate hedging instruments that are agreed, whether it is a new transaction or the restructure of an existing hedge. For the majority of our clients, our benchmarking service alone serves to save multiple times the investment they make in our services.
“Vedanta Hedging have a deep understanding and knowledge of complex derivatives, and have been invaluable in advising us on hedging. I have no hesitation in recommending Abhishek and Vedanta Hedging to other hoteliers / property companies for any hedging related advice.” – Aly Kassam, Crimson Hotels
We are very thankful to Mayad and Abhishek for all their assistance and support throughout our £230m refinancing. They have both been an absolute pleasure to deal with and it has been very comforting for us all to know throughout that we have been in the hands of two extremely capable individuals. Their understanding of our requirements as property investors and subsequent report on hedging strategy gave us the comfort we needed to make an informed decision on our derivatives. – Andrew Bull, Camden Market