Failure to properly measure the fair value of a derivative can result in significant losses over the life of the instrument. Using outdated valuation modeling techniques or simply not understanding how derivative fair values are measured often lead to additional scrutiny from management, auditors and regulators, further increasing costs to the company.
Knowledge and experience: Chatham has vast experience in derivative pricing. For more than 20 years, we have assisted our clients by injecting transparency into the pricing process. Using proprietary valuation models, honed and refined by our in-house quantitative experts, we execute more than $2 billion of derivative notional globally on a daily basis.
By routinely engaging in market hedging transactions, Chatham gains tremendous insight into where transactions are currently being priced. We are able to share that information with clients to help them obtain the best pricing possible. Our knowledge and experience translate into true economic gains for clients.
Sophisticated modeling: Securing competitive prices on derivative transactions requires a deep understanding of advanced quantitative modeling techniques. It also means keeping abreast with evolving market practices that drive changes to those techniques –insights usually beyond the reach of most companies.
Chatham’s team of quantitative experts has deep knowledge in derivative valuation modeling and takes approaches that are on par with the most significant financial institutions in the world. This allows us to level the playing field between our clients and their financial counterparties.
Experienced perspectives: Chatham is at the forefront of cutting edge valuation topics including CVA-DVA-FVA and OIS discounting. Our experts are thought leaders and have long been contributors to the global valuation standards-setting process through work with the FASB, the IASB, and the International Valuation Standards Council.
Not only does Chatham incorporate these leading edge concepts into our valuation methodologies, but our experts also support each client in understanding these items and assisting them with addressing questions raised by management, their auditors or other constituents. Chatham’s valuations do not come from a black-box; our team is thoroughly familiar with how valuations are derived and is ready to help clients understand the fair value of their derivatives.