Tag Archive for: Hedging

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Collars: The Hedge Smart Borrowers are Using Now

In our conversations over the years with borrowers of all shapes and sizes, in a myriad of industries, we’ve seen time and time again that all borrowers share the same basic goal: to take advantage of low interest rates now while protecting themselves if interest rates rise in the future. Some borrowers opt for the easy […]

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The ISDA Agreement: Borrower Beware

The ISDA agreement –  the seemingly incomprehensible document that governs most interest rate hedges  – has just been delivered to your inbox by your friendly banker. You’re in the midst of a floating rate financing negotiation with the bank that involves entering into a interest rate swap to hedge the floating rate risk. You notice in the email that […]

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Swap Fatigue?

Negative Mark-to-Market (”MTM”) lt is likely that close to 90% of recently executed pay-fixed swap have negative market values today.  Current swap rates are, for the most part, lower than those for swaps executed I, 3, 6, or 12 months ago. In addition to movement in rates, one needs to take into account that swaps […]

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The ISDA – A Hedger’s Minefield

This long, and to many people, incomprehensible document has just been delivered electronically by your friendly banker because you are about to execute a derivative or are contemplating one. Okay, it’s time to take a deep breath and not sign that document until you fully understand what it means to you. While your banker may […]

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Hedging in an Uncertain Interest Rate Cycle – Interest Rate Collar

Of the frequent publications we produce, this one is unique and worthy of your special attention as we dig into a few hedging alternatives that you may not be familiar with because they haven’t made sense for a very long time. If you have questions after reading please give us a call. In our conversations […]

Fed Derailed by Jobs Data?

Last Week: The highlight far and away was Friday’s jobs data, which came in lower than expected at 160K , with 19K of back revisions, versus a consensus of 200K, and versus a 203K average for Q1 2016. Treasury yields and the dollar nose dived after the news before rallying on the details of better wage […]

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Negative Interest Rates: Friend or Foe?

We’re all bombarded with news of the imposition of negative interest rates in Japan and in Europe, how it’s setting a historical precedence, why its happening and wonder if it’s possible in the US. While there’s a great deal of fear and misunderstanding around the idea that our beloved Federal Reserve could adopt a negative […]

No Man’s Land: Will the Fed Hike in June?

Last Week: Yellen & Co. reiterated that’s its in no rush to cool the economy and stood pat on interest rates in a sleeper of a Fed meeting. The release of Q1 GDP uninspired at 0.5%, the weakest in two years. Oil breached $46 a barrel, aided by a weakening US dollar, helped to fuel […]

Turning Japanese

Last Week: Overall a quiet one, the highlights of which were a meeting of current and old Fed Chiefs and the release of  FOMC minutes that reinforced our view that officials will hold off tightening again until at least June. A corollary however, is that more tightening is likely and more than the market is […]