Reconsidering the fixed-floating mix

Yield curves for sterling, the euro and the dollar are the steepest they have been for well over a decade, leaving companies with outstanding fixed-rate debt and large amounts of cash on balance sheets facing significant negative carry. Many corporates are reviewing their fixed-floating mix as a result. By Christopher Whittall

Record low interest rates may seem like every borrower’s dream, but not everything is as simple as it may appear at first glance. With benchmark interest rates in the US, UK and Europe at unprecedented lows, the temptation may be to issue fixed-rate debt to lock in a level that looks attractive by historical standards. Many corporates across the globe have done just that, rushing into capital markets last year to raise new funding at fixed rates.

But while short-term rates are at record lows