Interest-rate hedging

Companies are exposed to the risk of interest rates that they pay on their debt and receive on their deposits and other financial assets.

In many financial transactions, hedging the interest rate risk is a mandatory condition imposed by lending banks.

We study your interest rate risk and advise you on the hedging strategy that best suits your goals. Our independence and deep knowledge of the functioning of derivative markets allows us to help you implement the best hedging solution at the lowest possible cost, achieving total transparency on the price and conditions offered by banks on opaque products for the non-experts.

Foreign-Exchange Hedging

It is perhaps the most important risk faced by companies since it affects all aspects of their corporate finances, cash flows, revenues, assets and liabilities.

We help you evaluate and quantify your currency exposure by advising you on a global hedging policy without letting ourselves be influenced by short-term views of the market.

We will talk about the translation risk, a risk that can significantly affect the balance of companies with assets abroad.

Inflation Hedging

Being able to forecast future flows linked to inflation is an imprecise science, but the consequences of a errors are sometimes very significant. Thanks to our extensive experience in transactions linked to inflation flows we are well trained to help you hedge against this risk.

We have been involved in the largest hedges made in the world on Spanish inflation, and this allows us to transfer your inflation-linked risks to hedging transactions and to be able to properly document them so that your company does not take risks once it has been executed.

Commodities Hedging

Volatility in commodity prices can have a strong impact on your company’s balance sheet.

Our experience will allow you to identify and quantify these risks, and then establish strategies to reduce them in supplier/customer agreements in those cases that these cannot be perfectly hedged with OTC and futures.

In those cases where hedging is possible in the market, we will help you design the best hedging strategy, the best counterparty to execute it, and the best implementation.

En los supuestos en que sí sea posible una cobertura en el mercado, le ayudaremos a diseñar la mejor estrategia de cobertura, la mejor contrapartida para ejecutarla y la mejor implementación.

Financing

External financing is something inherent to most companies. In addition to the economic situation of the company or in the market, an inadequate choice of instruments and/or maturities can generate very important risks for the future health of the company.

Our continuous contact and deep knowledge of the appetite of institutional investors, and of the instruments they prefer in each moment, allow us to bring a differential value to our clients also in this field.

Credit Protection

By credit risk we mean the risk that companies have with their counterparties, clients, suppliers, etc. and the risk they have both on their own credit spread and on its evolution.

With our experience and knowledge, with the use of credit derivatives (CDS) and risk mitigants, you can minimize your exposure to this type of risk on your balance sheet.

Dispute Mediation & Expert Report Ordered by a Court

Due to the complexity of the documentation required and, sometimes, of the financial transactions themselves, there is always a risk of misunderstandings which, unfortunately, often have economic consequences and sometimes end up in court.

Our independence, our experience in banking and our specialization in these markets make us your best ally for this type of situations.

Accounting Reporting Regulations

Increasingly legal and accounting requirements mean that the formal implementation of many transactions involves legal, economic and accounting risks. With our advice and support, you will be aware of the risks and able to mitigate them, ensuring the quality and accuracy of their reporting.

In addition, all transactions carry reporting obligations. We will assist and guide you throughout the whole process.

Under NPGC (Spanish Gaap), IFRS (IFRS9, IFRS7) and similar accounting standards, it’s key obtaining accurate fair value calculations of your derivatives and understanding the volatility that hedging decisions may cause, ideally before any hedges are traded into. In our risk analysis engagements we include potential accounting and KPIs impacts of the different hedging alternatives, helping our clients in their conversations with their external auditor and supporting all the hedge accounting process after the hedge is traded (Post-Trade, derivative valuations with or without CVA -credit risk-, hedge accounting and ineffectiveness measurements, journal entries, yearend disclosures, etc).

Power Purchase Agreement

The current development of green energies means that supply contracts cannot be linked to traditional raw materials such as diesel. Power purchase agreements, in full development, seem destined to offer solutions to this risk.

Despite its novelty, in view of how it is developing in other European countries, we can anticipate that these contracts will be complex and will contain many elements of derivatives. Our experience and knowledge of these products will put you in an advantageous position when negotiating and structuring these products against your counterparty.