Amol Dhargalkar spoke with CFO Dive on hedging as inflation rises
Inflation has caught many companies off guard but it’s not too late to devise a hedging strategy or revisit the one you have to manage price volatility, Chatham Financial Managing Partner Amol Dhargalkar told CFO Dive.
Dhargalkar details the kinds of risks that corporates need to hedge against, including manufacturing and cloud software. He also reminds readers that communicating your hedging strategy to investors is nearly as important as the strategy itself. “If your program is small and your company is big, you can do things without having to explain them too much to investors, because it takes a very tiny portion of your financial results and line items,” he said. But if the programs are material, “you don’t want investors to look at your derivatives and start worrying, is this company doing the right thing?”
Our expertise for corporates
Chatham provides the knowledge and expertise needed to manage the financial risk associated with interest rate, commodity, and foreign exchange volatility. We develop and implement hedging strategies for hundreds of public companies annually, based on deep and productive banking relationships, giving us market data and insights to enable you to secure the best pricing and terms. Our goal is to empower you to strengthen your financial position and support your company’s financial objectives.
With expertise across hedge accounting, regulatory compliance, valuations, and hedging transactions, we can support all aspects of financial risk management. Our ChathamDirect platform provides convenient workflow, robust analytics, and comprehensive accounting methodologies, supported by our unmatched commitment to client service. This unique combination of strategy, operations, and technology will empower you to run a best-in-class hedging program.
Our featured insights
Chatham's Q4 2022 outlook: Inflation, market volatility, and LIBOR transition
Watch Chatham's Managing Partner and Chair, Amol Dhargalkar, discuss key trends for the upcoming quarter like inflation, market volatility, and LIBOR transition.
The Wall Street Journal asks Amol Dhargalkar why companies are keeping LIBOR debt on their books
The Wall Street Journal spoke to Amol Dhargalkar to understand why companies are keeping LIBOR debt on their books rather than replace it with SOFR when they refinance their loans.
7 ways to maximize FX and commodity hedging impact while minimizing costs
Hedge program costs can range from forward points, to trading costs, to fixed and variable operational costs that include systems and personnel. Program benefits often include risk reduction, operational ease, and favorable accounting treatment. This article will address leading practices and...
Amol Dhargalkar and Kevin Jones speak in Global Treasurer about corporate treasury's transition to SOFR
Despite some operational issues, global corporate treasurers have embraced SOFR and are working to transition their debt to the new benchmark. Speaking to Global Treasurer, Amol Dhargalkar and Kevin Jones discuss the progress of corporate borrowers making this transition.
SOFR for corporates: Considerations on debt and derivatives in 2022
As the LIBOR sunset date approaches, this article lays out the key considerations for corporations facing a SOFR trigger event in the debt or derivatives markets.
Amol Dhargalkar speaks to the Wall Street Journal about SOFR's rise in 2022
The Wall Street Journal spoke to Amol Dhargalkar about U.S. companies and financial institutions settling on a new interest-rate benchmark to replace LIBOR. Sales of corporate loans and derivatives tied to SOFR have soared in 2022, accelerating the shift away from issuing new debt tied to LIBOR.
In the Wall Street Journal, Amol Dhargalkar explains how looming LIBOR deadline will affect U.S. corporate treasury teams
U.S. companies will no longer be able to borrow against LIBOR starting on January 1, 2022. In the Wall Street Journal, Amol Dhargalkar explains what this means for corporate treasury teams.