Market Update: Banking in Uncertain Times – March 13, 2018 March 13, 2018 | 2PM EDT / 11AM PDT | 1 hour | Online | by Chatham Financial In today’s competitive lending environment, banks need to find ways to differentiate themselves from their peers to attract and serve the needs of their customers. As the interest rate environment begins to shift away from an extended period of low rates and as customers look for the best terms, understanding how changing economic factors affect lending strategies is key to success. This webinar provides bankers, relationship managers, and lenders critical insights they need to better serve their customers and succeed in today’s marketplace. In this webinar, we will explore these important issues: – Timely discussion about the current interest rate environment – Using swap-based strategies to win business from your competitors –…

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Corporates to Get More Time for Swaps Docs January 23, 2017 “To the extent that the non-financial end user is party to a CSA that [it] has negotiated apart from regulatory requirements, that CSA will not need to be modified,” said Kate Helmberger, director, derivative and regulatory contract advisory at Kennett Square, PA-headquartered Chatham Financial. Ms. Helmberger added that the letter can be completed using the ISDA regulatory margin self-disclosure letter, which can be accessed on the analytics site IHS Markit website or in paper form; in addition some banks have created their own representation documents. Read Complete Article

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LinkedIn Pulse: Swaps on a Blind Date? Three Questions for Community Banks By Bob Newman April 7, 2016 As community banks look for ways to differentiate themselves from their larger counterparts, which of the following advantages would be least likely to help win over a local client when competing for business: Community banks focus their attention on the needs of local families, businesses and farmers Community banks channel most of their loans to the neighborhoods where their depositors live Community banks offer nimble decision-making on loans because decisions are made locally Community banks match up their borrowers with an unknown third party from outside the community in unsecured derivative contracts Obviously, you would never see the last point serving as a pillar of a community bank’s mission statement or displayed on the wall as you enter its Main Street headquarters.…

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Executive Summary On October 22, 2015, U.S. prudential regulators published final and interim final margin rules governing swaps that are not centrally cleared (the “PR margin rule”) and on December 16, 2015, the Commodity Futures Trading Commission published its corresponding final margin rules (the “CFTC margin rule” and together with the PR margin rule, the “Margin Rule”). The Margin Rule requires financial end users to back their uncleared OTC derivatives transactions with cash or liquid securities. Who is Affected? Financial end users that may face these requirements include private equity, real estate, infrastructure, and microfinance fund vehicles, as well as banks and insurance companies, among others. These Financial end users could face substantial new requirements mainly as a result of the variation margin (“VM”) obligations. In contrast, banks are not required to impose margin requirements on nonfinancial end users which…

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Swap Spreads: Negative Spread Analysis November 2015 In this FI Bulletin, we will touch on the factors that are commonly said to be the drivers of swap spreads, the factors that may have changed these dynamics in the recent past, as well as some of the potential implications for risk management strategies in the current environment. Download This Bulletin

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Smoothing the Road to Reconciliation August 25, 2015, DerivSource By Christina Norland Christina Norland – Director of Global Regulatory Solutions at Chatham Financial discusses the thornier issues of portfolio reconciliation and how both parties can share the burden. Download Complete Article

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What a few weeks we’ve just lived through in the financial markets, with no shortage of turbulence, turmoil, and downright tribulation across the world. The S&P 500 tumbled more than one hundred points last week, a dubious distinction it had not achieved since the grim days of October 2008 – as of this writing, it’s fallen more than fifty points in a single morning. China’s yuan (partially) and Kazakhstan’s tenge (entirely) shifted to a freely floating currency from central management, causing the former to fall materially and the latter to plummet precipitously. A barrel of crude oil cost 32% less than it did at the outset of July. Against this backdrop of coordinated devaluating pressure, it’s no surprise that market volatility measures have jumped considerably. 2-year cap volatility, a measure of the cost of insuring against rising interest rates, has…

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Guest view: U.S. swaps need clearer reform July 25, 2014, BreakingViews By Luke Zubrod Clearer changes are needed for U.S. derivatives markets than the Dodd-Frank Act’s prescription. Four years after the regulatory reboot became law, many of the reformers’ hopes have been realized. Download Complete Article

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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 rates. Summary: The consortium and company needed to determine the best way to address the currency mismatch between cash flow and interest expense, as well as the optimal way to create a higher percentage of fixed rate debt. Chatham Financial educated the team on the use of cross-currency swaps, created transparency in the execution process of the hedging transactions, and assisted in the negotiation of the key documentation for the derivatives to ensure no hedge counterparty stood ahead of other secured lenders to the business.…

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Experts in CRE debt and derivatives valuation Determining the accurate, fair value of commercial real estate loan debt or applied derivative instruments may seem simple on the surface. Nonetheless, improper measurements can lead to significant, long-term financial loss over the course of the loan or derivative. It may also prompt questions from investors, auditors, and regulators. How Chatham’s valuation services help real estate clients Independent third-party expertise: Chatham has been working with real estate companies for over 20 years, using proprietary models and independently gathered data to value debt and derivatives. And our advisors are in the markets every day, continually building market knowledge, monitoring trends, and adjusting for changing standards. From caps, swaps, and FX forwards, through to more exotic derivatives, Chatham offers a robust platform that provides clients with real-time values via our secure website. Our best-in-class valuation…

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