Swap offer: think before you sign!

By now, most interest rate swap clients will have received an advance based on the Interest Rate Derivatives Recovery Framework. Before the end of last year, the 2 banks with the most interest rate swaps (Rabobank and ABN Amro) sent some final offers. These are limited numbers, because the bulk is expected this year. What do we know so far, and what should you pay attention to as an interest rate swap customer?

At the end of last year, a number of banks were still active in holding information meetings. The message here was: more delay, but be patient and wait for our proposal. In addition, they were also told that good work is being done so that the customer does not have to do anything.

File are puzzles
It is known that the banks (during the assessment) often have to deal with incomplete files. Rabobank has also recently emphasized that every swap file is a 'puzzle'. All that puzzling takes time and, as the banks now acknowledge, it is a very complex matter.

Where the bank's account manager first pretended to be the expert, he now indicates that he is only a conduit. There is now also a separate department that deals with interest rate swap applications. This year, most customers will receive an offer. In some cases, the bank even comes by to explain the offer in a personal conversation.

What should you pay attention to?
What should you pay attention to as an interest rate swap customer? In any case, be aware that banks do not have all files complete. The proposals therefore often make assumptions. It is therefore advisable to check these carefully. Some files are also suitable for discussion. 

That is precisely why in the Recovery Framework, a binding advice has been expressly issued for a number of aspects to the Derivatives Committee (comparable to a kind of petition procedure). If your file lends itself to this, you will have to be able to substantiate your position and respond actively to it. It is also advisable to raise this with the bank itself first. Also pay attention to the deadlines.

Recovery Frame
However, don't be rushed when it comes to acceptance. The Recovery Framework states that a proposal will definitively expire after 12 weeks (after the offer has been sent). Not after the first 4 weeks, as is incorrectly suggested in some letters.

The first offers show that some banks (including Rabobank) are already not very willing to give a specification of the compensation offer. This while certain documents and the calculation are essential to verify whether the proposal is actually correct.

As a customer you have the right to insight into the way in which a proposal has been developed. This is also very important, as acceptance of the proposal implies a final discharge. It is therefore logical that, after everything that has happened, the customer no longer trusts the blue eyes of the bank man, but wants a substantiation of the calculation of the compensation offer.

Marianne Adama

Marianne Adema is a lawyer at Adema Advocatuur and Advice. She specializes in financial law, agricultural law and real estate law. Adema assists many agricultural entrepreneurs and has an advisory and litigation practice. She is also a legal advisor on various wind turbine projects.

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