Financial risk arising from a new investment, acquisition, merger or IPO can be challenging to effectively hedge.
A deal contingent hedge is a cost-effective solution to cover these risks and allows the client to avoid hedge termination costs as the hedging agreement dissolves if the transaction falls through as a result of pre-defined conditions precedent (CPs) not being met.
Since deal contingent derivatives are tailor-made to each transaction, pricing is, by definition, less transparent than for vanilla products. Strict protocol and process management between competing banks leads to optimal outcomes.,
Deal contingent hedging is required during the intensive period around the exchange, when stakeholder time is scarce and expediency is critical.
From designing an optimal hedging strategy to implementation with competitive pricing, our experience and contacts in the market mean we are able to offer a streamlined and transparent process with a quick turnaround.