Kazrasida When we are writing case study solution we often have details on our screen as well as in our head. Goodrich-Rabobank Interest Rate Swap Case Study Solution Once you have developed multipronged approach and work out various suggestions based on the rabobaank tools. D Satish ; Manish Agarwal. You have to recommend business unit level recommendations. Third, due to the unique nature of competition in financial services, even these modest effects raise significant concerns about migration of credit-creation activity to the shadow-banking sector, and the potential for increased fragility of the overall financial system that this might bring.
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Related products Abstract The case study discusses the first ever interest rate swap deal between two corporates - BF Goodrich and Rabobank. The case study explains how Goodrich encountered financial problems at the beginning of the s. However, with a deteriorating financial position and a BBB-rating, it was impossible for the company to get a long-term loan at favorable rates.
Salomon Brothers, an investment banker, suggested to Goodrich that it issue floating rate notes and then swap them with fixed rate financing. At the same time, one of the leading European banks - Rabobank - wanted to borrow the same amount in fixed rate Eurobonds.
Salomon approached Rabobank and at last the bank agreed to the swap deal in principle. It was at this juncture that Morgan Guaranty Bank came into the picture. Morgan acted as a swap dealer between Goodrich and Rabobank and executed two swap deals, one each with Goodrich and Rabobank for a one time initial fee and annual fees for 8 years. Morgan undertook to guarantee of payment in case of default by any party. At last, the swap deal was executed successfully. The case will help students: Explain the mechanism of interest rate swaps in the special context of the first interest rate swap deal between two corporates - Goodrich and Rabobank; Demonstrate the intricacies involved in swaps deals; Explain the advantages of interest rate swaps deals.
Goodrich Rabobank Interest Rate Swap Essay example
How large should the discount X be to make this an attractive deal for Rabobank? How large must the annual fee F be to make this an attractive deal for Morgan Guaranty? How small must the combination of F and X be to make this an attractive deal for B. Is this an attractive deal for the savings banks?
Dole Brushing up HBR fundamentals will provide a strong base for investigative reading. Implementation framework helps in weeding out non actionable recommendations, resulting in awesome B. Step 2 — Reading the B. Thus to avoid tilting the playing field in such a way as to generate a variety of damaging unintended consequences, increased regulation of the shadowbanking sector should be seen as an important complement to the reforms that are contemplated for banks and other large financial institutions. You should make a list of factors that have significant impact on the organization and factors that drive growth in the industry. HBR case studies provide anecdotal instances from managers and employees in the organization to give a feel of real situation on the ground. About this item Settings Related products Abstract The case study discusses the first ever interest rate swap deal between two corporates — BF Goodrich and Rabobank.
GOODRICH RABOBANK PDF
Goodrich-Rabobank Interest Rate Swap