New approaches to Infrastructure market risk New funding solutions for Infrastructure projects pervade the market, each with dramatically different risk metrics in terms of refinancing and future breakage costs. These factors can have major impact on returns over the asset’s life. At the same time, actively assessing such risks is a new exercise for many investors. Borrowers must also evaluate the benefits of various investment currencies, as well as short versus long-term debt, and flexibility versus long-term debt with penal breakage terms. The fair value differential among these alternatives is measured in percentage points of asset value. The Benefits of Chatham Infrastructure and Policy Strategies Expert advice: Chatham advises leading investors and lenders in developing policy and strategic approaches to market risk. We establish complete risk management operations from scratch as well as revise and benchmark policy documents and implementation.…

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Dodd-Frank End-User Clearing Exception: Practical Considerations for Preparing Your Board March 12, 2013, DerivSource By Matthew E. Hoffman and Christina Norland The initial election of the end-user clearing exception represents a unique opportunity for boards to comply with Dodd-Frank and meet their fiduciary duties. Matthew E. Hoffman and Christina Norland, both of Chatham Financial explain how boards can establish a proper foundation of robust policies, processes, and procedures that will position their companies to hedge efficiently while evolving with the rapidly changing post-regulatory regime. Download Complete Article 

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End-User Exception Election For swaps subject to mandatory clearing, end users will be exempt if they qualify for the end user exception and provide justification. The end user exception must be elected on a per trade basis. If an end user is facing a swap dealer, the exempt end user would provide the information to its swap dealer counterparty, or its financial entity counterparty. The dealer or financial entity would report this information to a “swap data repository” along with the specific trade details. If two end users face each other, one of the end users would have to notify the CFTC, through reporting to the SDR, that the election to use the end-user exception to mandatory clearing. The CFTC’s final rule would require any end user that wishes to be exempt from clearing to report additional information on an…

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Impact on Equity REITs Impact on Equity REITs Guide

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Impact on Private Equity Funds Impact on Private Equity Funds Guide

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Impact on Private Real Estate Funds Impact on Private Real Estate Funds Guide

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Impact on Non-Financial End Users Impact on Non-Financial End Users Guide

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Overview of Central Clearing Requirements for End-User Exception: 1. Must not be a financial entity (small bank exemption can be used for banks with less than $10bn in assets) 2. Must be hedging commercial risk 3. If public, must have board approval to not clear trades 4. Must complete CFTC end-user exception questionnaire and submit to a swap data repository Clearing Timeline 1. Proposed mandatory clearing determination published by CFTC in the Federal Register on August 7th, 2012. 2. 30 day comment period ends September 6th, 2012. 3. Final mandatory clearing determination released as early as September 7th, 2012 (not expected to slip more than a month or two if it does slip) 4. Swap dealers, major swap participants, and active funds (private funds executing an average of 20 trades or more a month) required to clear as early as…

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