Swap or Cap? How much…how long?
We begin every swap or derivative assignment with an examination of the client’s financials, debt pro forma and a discussion of risk tolerance and future flexibility requirements. Within this framework we consider appropriate products and structures. We will also work with a client to develop and implement a Derivatives Use Policy, if needed.
We then work closely with you to analyze the economic benefits and risks of the different hedging products and structures in the current market environment. This analysis frequently includes:
- Historical Back-Testing
- Hypothetical Rate Scenarios
- “Extreme-case” Outcomes and Probabilities
DAG utilizes its own real-time analytical software to price hedges. With these tools we can value each component part of a transaction and provide ultimate price transparency.
We create transaction specifications and contact potential providers if conducting a competitive bid.
In Depth: Negotiation and Execution