Examples of mandates

Listed real estate management company

needs to be protected against interest rates and inflation increase

€2.5b turnover
€4b debt

Business need: Protecting the company against interest rates and inflation appreciation.
Services provided: Market monitoring. Regular proposals of hedge inception or optimization. Support in hedge analysis, implementation and optimization. Hedge portfolio valuation. Performance and IFRS reports production.
Results: Improved hedge reactivity. Hedge opportunities better captured. Hedge costs reduced. Financial expenses protection increased. IFRS reporting pack improved with auditors.

Industrial LBO, export

needs to be protected against currency depreciations and interest rates increases

€200M turnover
€50M debt
Excess cash

Business need: Protecting the company against currency depreciations and interest rates increases.
Services provided: Formalization and implementation of a currency and interest rates hedging policy. Support in inception and management of hedges. Market monitoring. Follow up, optimization and valuation of hedges.
Results: Risks monitored and measured systematically. Foreign exchange and interest rates hedges implemented in a systematic manner after price control. Investments evaluated based on quantitative and objective criteria. Cash flows, operational and financial result, as well as financial covenants protected against financial markets fluctuations.

Industrial small size company, commodity importer

wishes to get protected against an increase in commodity prices
€10M turnover

 

BUSINESS NEED: Protecting the company against commodity cost appreciation.
Services provided: Identification and quantification of risks derived from commodities, including currencies. Implementation of a commodity and hedge management policy. Assistance in commodity and hedge management. Market surveillance. Portfolio monitoring, optimization and valuation.
Results: Commodity and foreign exchange hedges systematized, by project, at controlled cost. Cash flows and operational margin protected against financial markets fluctuations.

Multi family-office

wishes to protect its clients against the currency and interest rates risks induced by their asset / liability structure
BUSINESS NEED: Assisting the FO in the management of interest rates and currency risks induced by his clients’ funding and investments, as well as in the negotiation of derivative products (hedges, certificates, autocalls, etc.) with banks and brokers.
Services provided: Simulations, quotations and proposals of bespoke hedging strategies (e.g. spot and forward start swaps, caps, collars). Term Sheets formalization. Support during negotiations and transactions. Follow-up and optimization of the portfolios. Valuation and performance reporting.
Results: Financial expenses and investment returns optimized. Improvement of derivative products customization and reporting (back and middle-office)

Investment fund

wants to quantify the risks related to currencies, interest rates and commodities before acquiring a company
BUSINESS NEED: Identifying and measuring the market risks (currencies, interest rates, commodities) embedded in a targeted company.
Services provided: Participation to the financial due diligence and interview of the CFO in order to identify the risks linked to the business (operating and financial flows, intercompany or external), estimate the effectiveness of the management policy and identify the stake on the purchase price or the future results post-acquisition.
Results: Risks quantified. Advantages and disadvantages of the existing hedging policy highlighted. Structural or short-term impacts isolated. Proposals to correct or realign them with the fund's objectives in case of acquisition.

Small size company, secondary LBO

has to protect its financial expenses against interest rates rise after its bank debt renegotiation

€100M turnover
€50M senior debt

Business need: Putting in place a hedging strategy that shall respect the hedging obligation and the managers' objectives.
Services provided: Analysis of the hedging obligations and objectives, presentation of the advantages / disadvantages / costs of various hedging strategies (including existing hedges “recycling” and novation, and impact of negative rates combined to the floor on the Euribor that makes some strategies ineffective), financial expenses simulations, recommendations, assistance during the bank consultation, review of terms & conditions and documentation, accounting and back-office quarterly reporting following inception of hedges.
Results: Optimized hedging strategy and rate taking into account the managers’ objectives and the negative rates context. Valuation and back-office assistance during one year.