CMS Sept 2022

Internal Use Only

Client Derivative Interest Rate Swaps

Based on creditworthiness and other factors, the bank would price a floating rate loan to borrower at SOFR + 2.50%

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Internal Use Only

Traditional Back-to-Back Swap

The borrower has two separate financial contracts – a loan & a pay fixed swap. This results in an effective fixed rate for the borrower.

Lender

Floating Rate Loan Borrower

Pay 1m SOFR plus 2.50% floating

Floating Rate Loan

Pay Fixed 5.50%

Interest Rate Swap

Interest Rate Swap

Receive 1m SOFR plus 2.50% floating

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