Late Term Hedging of IR Risk Under FAS 133
Given the steepness of the yield curve , many companies are considering (and many banks are pitching) the strategy of swapping existing fixed rate debt into variable so companies can enjoy positive...
View ArticleCP Issuers – Beware of Re-Designation Pitfalls!
Given the extreme volatility in credit markets and the shutdown of commercial paper (CP) issuance over the last year, many CP issuers missed their forecasts, which were hedged with payer swaps. Because...
View ArticleWill FAS 133 (ASC 815-20) Revised be the New Frontier for Derivative Accounting?
The FASB is expected to issue an exposure draft to FAS 133 (ASC 815-20) as part of the Financial Instruments Project in the next few days. Assuming for once, that the FASB keeps to its timetable (don’t...
View ArticleBad Credit = No Hedging?
The last few years have proven to be extremely challenging for companies issuing debt. Even if a company was lucky enough to find a bank willing to underwrite an issue, the pricing was prohibitive and...
View ArticleHow the Global Financial Crisis Killed the LIBOR Benchmark
Given that the interbank market has already moved to OIS discounting, the next logical step will be for this trend to trickle down into the corporate sector as well.
View ArticleInterest rate risk, Sweden, and FAS 157 (ASC 820)
Common concerns among Scandanavian countries include challenges of non-performance (i.e. credit) risk in valuing derivatives.
View ArticleWhy Some Airlines May be Heading for Restatement
Many airlines hedge their purchases of jet fuel through various means, but they should beware of using one method for assessment and another for measurement.
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