Deal-contingent Hedging

Jackie Bowie and Amol Dhargalkar will host Chatham’s upcoming webinar, providing perspectives on the current global economic landscape and financial events impacting today’s market. Examine ways to mitigate risk and enhance decision-making in the capital markets.

When your organization is preparing for a merger or acquisition, your treasury team can actively shape its success, assuming a pivotal role in the due diligence, financing, and post-merger integration processes.

Extraordinary opportunities and challenges await treasury teams preparing for success in 2024. From the potential resurgence of M&A activities amid moderating inflation to ongoing impacts of geopolitical instability and global paradigm shifts, multiple converging trends will shape treasury...

FX hedging costs vary across currency pairs. “Cost” from a certain direction of capital flow is in fact a “gain” in the opposite direction.

When companies think about hedging their foreign exchange (FX) risk, it is important for them to consider what types of risks they have and which currencies they might want to hedge. Most operational FX risk falls into two broad buckets, cash flow risk and balance sheet risk.

Considering the ongoing hawkish rhetoric from the Federal Reserve, the U.S. dollar continues to show meaningful strength since reaching a 12-month low earlier this summer. As the Fed attempts to stick a successful soft landing, multinational companies (especially those with foreign-denominated revenues) are once again facing negative FX impacts.

A recent example of deal-contingent hedging for a large European private equity fund.

With continued market volatility and an evolving geopolitical landscape, mitigating financial risks associated with cross-border M&A transactions reduces the risks to closing for all parties involved and ensures the success of a deal. A deal-contingent hedge is an instrument that protects against...