Case ID: 9A90B037
Solution ID: 20055

Columbia River Pulp Company Inc Interest Rate Hedging Strategy Case Solution


An positive covenant around the $200 MM floating rate loan needed Columbia River Pulp (CRP) to hedge believe it or not than $100 MM not under three years inside a maximum rate of twelve percent. The choices incorporated interest rate SWAPs, CAPs and COLLARs. What is the optimal hedging structure? Should CRP hedge its floating rate debt, or simply the quantity needed beneath the loan agreement? (This case might be combined with two related cases bearing the identical title, 9A95B034 and 9A90B036. A Microsoft Stick out spreadsheet could be acquired for use using this case, product 7A90B037.)

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