The World After Brexit

 
The World After Brexit
Over the last few days, we’ve already spoken with numerous clients about the potential financial and regulatory impacts of the UK’s vote to leave the European Union. As the referendum’s outcome reverberates through the markets, here are a few key notes:
1) What happened in financial markets? The British


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Hedging Lessons from Brexit

 
Hedging Lessons from Brexit
On Thursday, British citizens will vote in a referendum posing this question – “Should the United Kingdom remain a member of the European Union or leave the European Union?” The result will have sweeping implications for trade policy, the flow of immigrants, and even the continued viability of the


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Market Insights – June 20, 2016

Market Insights
June 20, 2016
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Prior Week Summary

The curve continued to flatten for much of last week, as traders marked time in anticipation of the “Brexit” vote. The world’s central bankers have weighed in and currency volatility has increased to multi-year highs as each


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Overpaying for Baking Soda (and Underpaying for Ice Cream)

Every time we run to the grocery store or pharmacy for household staples like baking soda or ibuprofen, we’re faced with a choice – to buy the name brand or the store brand. On the one hand, there’s something reassuring about purchasing a nationally-recognized brand; after all, if they can afford to advertise during


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Private Equity Case Study: Currency Challenges

Private Equity Case Study: Currency Challenges
Our Client:
A large private equity firm executing an acquisition in a developed economy.
Situation:
A private equity consortium had agreed to acquire a North American company. Due to the state of debt capital markets, a substantial portion of the debt capital structure was denominated in USD with floating


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Corporate Case Study: Interest Expense & Currency Risk

Corporate Case Study: Interest Expense & Currency Risk
Our Client:
A software firm with contracts in multiple currencies, a complicated legal structure and unique debt structures.
Situation:
The company had recently increased leverage from a negligible amount to roughly 50% of its enterprise value in a recapitalization, compounding the currency risk. The company was trying


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Serving Financial Sponsors

Chatham works with financial sponsors at many of the largest firms globally. Our spectrum of deals over the years gives us a rare perspective on how to add value to maximize their investment goals. Chatham’s holistic strategies reflect a deep currency, rate and hedge accounting expertise and allow us to devise optimal economic and accounting


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Foreign Currency Hedging

Foreign Currency Hedging, fx hedging, currency hedging

Managing the foreign currency rate changes that can impact returns
Investors who purchase foreign assets run the risk that movement in local currency rates can reduce the underlying value of their expected/projected return. Many investors seeking to reduce such risks are wary of making large upfront cash outlays as well as potential breakage


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Deal Contingent Hedging

PRIVATE EQUITY, hedging, Deal contingent hedging

Mitigating risk and avoiding dead deal costs
When a private equity investor agrees to purchase a company in a foreign currency rather than the currency in which the debt or equity is funded (e.g. investing equity from a US Dollar denominated fund in a JPY asset or raising debt in USD for a CAD investment),


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Investment Fund Risk Analysis & Program Design

PRIVATE EQUITY

Analyzing risk and designing programs for private equity firms
As an investor in companies that involve foreign entities, currency risk becomes an inevitable factor. Private equity investors need to consider these risks in the context of currencies involved. This includes market liquidity and optimal structure of the debt as well as debt of the


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