Interest Rate Collars

Setting a Range, Saving Money

Limit exposure to rising interest rates, in exchange for limiting benefit from falling interest rates, and pay less than for an interest rate cap.

Associated Bank offers interest rate swaps structured with collars:

  • Work with Associated to determine your preferred interest rate range, marked by a cap and a floor
  • We compare each period’s interest rate to a benchmark rate, typically LIBOR
  • If the benchmark rate exceeds the cap, Associated pays you the difference for the period
  • If the rate falls below the floor, you pay Associated the floor rate

Terms of the interest rate collar can be tailored to the underlying loan. Ask your relationship manager about this cost-effective protection against volatile interest rates.

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