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How can companies benefit from expected interest-rate hikes?

Corporate investors can hedge against the expected interest rate rise in the US with a variety of instruments, including ETFs, TIPS, options, forwards, futures and swaps, write Tom Boczar and Jeff Markowski on AFPOnline. “Importantly, each of these tools can produce the desired economics, but they all can have very different tax consequences for a company,” they write.

In this article, they discuss how to maximise investments with tax efficiency in mind, using “an interest rate strategy that can be employed to not only potentially benefit from the normalization of the yield curve, but also accelerate the deductibility of capital loss carryforwards”.

Read more in the full article here.


CTMfile take: This article gives an example of how a multinational could use an interest-rate strategy to benefit from rising interest rates.  

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