BRD completed its first loan with embedded derivative

BRD – Groupe Société Générale has completed its first “Loan with Embedded Protection against Interest Rate Increases” (Loan with Embedded Derivative), offering corporate clients an innovative solution that combines financing and interest rate risk protection within a single product.

The new structure facilitates companies’ access to interest rate risk management instruments and provides greater predictability over financing costs, in an economic environment marked by volatility and uncertainty.

“The main benefit for the client is the integration of financing and protection against rising interest rates into a single product that is simple to access and manage. Instead of having separate contracts, accounting records and settlements for the loan and the financial instruments used to manage interest rate risk, the client benefits from a single agreement, a single payment flow, as well as simplified administrative and accounting requirements throughout the financing period.

This means that BRD clients now have access to products well established in international financial markets, providing them with an efficient solution for managing the financing costs associated with investment loans, tailored to their specific needs and objectives,” said Marius Stoica, Executive Director, Financial Markets, BRD – Groupe Société Générale.

The Loan with Embedded Protection against Interest Rate Increases is a medium- or long-term financing solution that incorporates an interest rate risk management mechanism. Depending on its objectives and risk profile, the company can choose to either fix or cap its financing costs.