Market Risk Management and Derivatives

The interest rate, foreign exchange, and commodity hedging experts at Synovus can guide you through the challenges of a constantly changing interest rate environment and the everyday complexities of international business, as well as the volatility associated with commodity prices.

Build a solid risk management strategy

We can carefully analyze your company’s risk exposure and identify ways to mitigate it. Our solutions frequently involve hedging the following market risks with customized solutions.

Interest rate hedging tools

  • Interest rate swaps – These financial contracts allow two parties to exchange interest rate payments over a specific period of time. Swaps come in fixed and variable rate arrangements and can be customized as forward starting, accreting and no-cost cancellation.

  • Interest rate caps – Akin to an insurance policy, these derivative instruments limit the maximum interest rate charged on a loan or other financial product.

  • Interest rate collars – The combination of an interest rate cap and floor helps create a stable range of interest rates within which the borrower’s interest payments may fluctuate.

Foreign exchange hedging solutions

With extensive experience observing overseas markets, our FX advisors can explain the risks and opportunities of conducting business in currencies beyond the U.S. dollar. This often involves structuring agreements known as forward contracts.

Outright forward contracts allow you to lock in a fixed exchange rate for a set period, which can hedge your risk exposure. Similarly, window forward contracts allow you to lock in an FX rate, while adding the option to draw down from the principal at any time. This flexibility can improve cash flow, especially for companies that need to match incoming payments earlier in the window period.

Commodity hedging offering

We support our customers who consume or produce commodities by allowing them to hedge multiple commodity groups, including:

  • Energy and related derivatives
  • Base and precious metals
  • Agriculture
  • Others upon analysis

The platform can support multiple structures including swaps, puts, calls, collars, and combinations for these various commodity price exposures.

Commercial Insights

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