Derivatives · glossary
The cost of the loan and the hedge together: loan interest, plus what Atlas pays on the swap, less what it receives. In the first quarter it was €550,000. On the hedged part it stays the same whatever the fixing. Hedge Sheet 1 · Chapter 2
Explained in Chapter 2, The Swap, Line by Line, of Derivatives.
A swap becomes a hedge only beside the loan it hedges. The loan costs EURIBOR plus a margin of 3%. In the first quarter that is 7% on €35,000,000, or €612,500. The swap pays €62,500 back, so the quarter's all-in cost (the total cost under both contracts) is €550,000.Read Chapter 2, The Swap, Line by Line →
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