Common Challenges to Hedging FX Risk

Common Challenges to Hedging FX Risk
Chatham Financial White Papers – October 2015
 
Early 2015 ushered in currency volatility and dollar strength unseen in decades. Every day, new headlines of companies negatively impacted by large exchange rate movements greeted readers of financial news. Earnings calls are littered with references to “constant currency” impacts and


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FX scandal’s lessons for asset owners

Pensions & Investments: FX scandal’s lessons for asset owners
By Peter Ahlin & Luke Zubrod
August 14, 2015

“The foreign exchange manipulation scandal involving major global banks demonstrates that at their core, currency conversions are not merely operational processes. They are significant drivers of value that must be carefully managed. Pension boards


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Unbelievable Calls

Eight days after the Super Bowl, NFL fans worldwide are still talking about that play call. With 2nd and goal at the Patriots one-yard-line, trailing 28-24 with less than a minute on the clock, the Seahawks had strong alternatives at their disposal. Their powerful running back Marshawn Lynch, nicknamed Beast Mode for his ability


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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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Corporate Case Study: Tracking & Reporting for Hedges

Corporate Case Study: Tracking & Reporting for Hedges
Our Client:
A global musical instruments manufacturer and distributor who actively manages FX and interest rate risk exposures.
Situation:
The company was managing over 1,500 derivative instruments in Excel and was applying hedge accounting for more than half of their derivatives portfolio. They were applying a


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VIDEO: ChathamDirect

VIDEO: ChathamDirect
Michael Bontrager and others from Chatham Financial involved in the project describe why ChathamDirect was developed and what client needs it meets in managing risk. A full transcription of the video is available below, but you can view the video here:

CHATHAM – DIRECTOR’S CUT – FINAL



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Independent global leaders positively impacting the debt and derivatives markets

As a global financial advisory services and technology solutions firm, Chatham Financial specializes in the debt and derivatives markets. Our solutions serve the investment and risk management needs of clients across a spectrum of industries and markets. As such, we have offices in the United States, Europe, Asia and Australia.
Through our blend of


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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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Portfolio Services

Optimal management of large and complex debt and derivative portfolios
As infrastructure portfolios grow, so do the challenges of managing them. In recent years, such challenges are compounded by more diversified debt terms and increased regulatory requirements, including trade reporting and portfolio reconciliation.
In addition, derivatives have a heightened reputation for risk. The resulting increased


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Foreign Currency Hedging

Foreign Currency Hedging for Corporates
As companies expand globally, currency risk can significantly impact both operational results and financial statements. This can stem from mismatching revenue and expense currencies, managing various operational currencies under the same corporate umbrella, or even short-term liquidity needs in particular currencies.
Oftentimes, companies may seek out economic exposure to


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