Energy Swaps

Are fluctuating energy prices impacting the profitability of your business? Our energy swaps can help. Enjoy the security of fixed energy prices at any time.
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Contact our Risk Management Solutions team at  514-394-4556 or at 1-844-394-4556 (toll-free) from 8 am to 5 pm (ET)

Lock in your energy costs

Locking in prices with the energy swap allows you to:

  • Reduce the impact of major fluctuations in the energy market on your profit margins
  • Maintain steady product and service prices despite increasing energy costs
  • Manage your cash flow more effectively with predetermined payments
  • Focus on production
  • Gain a potential advantage over your competitors when responding to a call for tenders

A simple, four-step approach

Étape 1

 

Decide on a term,1 start date and energy volume (usually calculated monthly).

Étape 2

 

Negotiate a fixed price (swap price) with National Bank.

Étape-3

 

Buy energy from the supplier of your choice, at the price offered at the time of purchase.2

Étape 4

 

At the end of the term, settle up any difference between the market price and the swap price.

Two possible scenarios

The market price is higher than the swap price

National Bank will pay you the difference between the swap price and the market price for the value of the contract.

The market price is lower than the swap price

You will pay National Bank the difference between the swap price and the market price for the quantity negotiated for the swap.

Features of National Bank's swap

  • Price can be fixed for up to 24 months—sometimes more—depending on your circumstances and authorized credit
  • Flexible reference dates (monthly or weekly average, set date, etc.)
  • Access to a range of energy indices including petroleum, gasoline, diesel, natural gas, propane gas and jet fuel
  • Generally, no upfront payments (margin calls) or refunds are required during the contract period
  • Has less impact on your cash flow than a futures contract
  • Currency risk is reduced with swaps available in both U.S. and Canadian dollars

 

Eligibility criteria

  • Annual consumption volume of 500 000 litres or the equivalent.
  • Have set up a credit facility3 and obtained the legal documents required by National Bank
  • Undergo a thorough risk assessment by our specialists to establish the suitability of the product

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Swap Agri-food

 

Do you own an agri-food business?

Find out about our swaps

International transactions

 

Need to show proof of solvency to an international client?

Learn about our guarantees

Currency accounts

 

Need to pay a client outside Canada?

Explore our 15 foreign currency accounts

1 Term of one month to three years
2 Price available at the time of purchase: current market price (spot price) +/- local cash basis.
This content is for information purposes only and does not constitute an offer or solicitation to buy or sell any securities or financial products. Users must individually evaluate the benefits of a particular transaction, in consultation with their own professional advisors to determine whether the terms and risks of the transaction are appropriate for their specific needs.
3 Subject to credit approval by National Bank of Canada.