Hedge based bank borrowings breakage costs????

Hedge based bank borrowings breakage costs????

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A client changes banks and in order to settle the old loan there was an early redemption penalty and in addition a 'breakage' cost. The original loan was structured using a bank product call a hedge based loan. With the fall in the bank base rates the value of the hedge fund reduced and in order to settle the loan, there is a breakage cost of over £100k. This is being questioned and may lead to legal action. How in the meantime should this cost be represented in the accounts and what would be the best treatment for tax. Any suggestions would be welcome thanks.

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