Developing & Positioning Derivative Solutions for Corporate Clients

Developing & Positioning Derivative Solutions for Corporate Clients

Euromoney Training
Logo Euromoney Training

Need more information? Get more details on the site of the provider.

Starting dates and places

There are no known starting dates for this product.

Description

"The course was very articulate, educative and interactive. It provides an in-depth knowledge of the various derivatives solutions for the corporate world. All encompassing in terms of different spheres of product lines: bonds, FX and other derivative products" Treasury Sales Officer, Fidelity Bank The use of derivatives in corporate risk management has grown rapidly in recent years. The aim of this course is to provide a comprehensive overview of derivative instruments used for mitigating risk in corporate banking. Tailored specifically to the needs of relationship bankers, this course will help delegates strengthen their knowledge of the economic markets and the implications and uses of de…

Read the complete description

Frequently asked questions

There are no frequently asked questions yet. If you have any more questions or need help, contact our customer service.

Didn't find what you were looking for? See also: Commodities, Treasury, Pricing, Education, and Public Finance.

"The course was very articulate, educative and interactive. It provides an in-depth knowledge of the various derivatives solutions for the corporate world. All encompassing in terms of different spheres of product lines: bonds, FX and other derivative products" Treasury Sales Officer, Fidelity Bank The use of derivatives in corporate risk management has grown rapidly in recent years. The aim of this course is to provide a comprehensive overview of derivative instruments used for mitigating risk in corporate banking. Tailored specifically to the needs of relationship bankers, this course will help delegates strengthen their knowledge of the economic markets and the implications and uses of derivatives. The agenda explores how the bank’s clients could use derivatives to mitigate interest rate and foreign exchange risks. The commodities market and its derivatives products are also covered in details. This course focuses on practical applications of derivatives in real-life situations. Attendees will learn how to understand their clients’ key risk areas and spot derivatives opportunities. Case studies will be performed where delegates will analyse a risk scenario and construct the appropriate derivative strategy and then present it to rest of the group. Attend this intensive 4-day course and learn how to: Identify the key risk areas for your corporate customers Explore key derivative instruments and strategies used to hedge interest rate and currency risk Examine the cash flow characteristics of these financial instruments Understand the commodities market, its derivatives and the uses in clients’ portfolio and risk management Understand the needs of your corporate customers and define an appropriate derivatives strateg Develop and deliver an effective derivative offering proposal for your customers Plus: The course takes a real-life approach. Throughout the course, delegates will work in groups to create and present winning derivatives proposals. Who should attend?: Corporate Banking Relationship Managers SME and Banking Relationship Managers Heads of Regional Banking and Branches Heads of Corporate Banking
Day 1 Global and regional market background Introduction and course objectives Developing closer relationships through a more consultative approach Delivering the right level of information: becoming the knowledgeable adviser Macroeconomic and socio-political analytical approach Providing comprehensive information on the uses and dynamics of derivatives How the financial world changed after the 2007 / 2008 crisis A brief history of the causes and effects of the crisis Ramifications of increased counterparty risk perception Implications of reduced certainty of funding sources - Increased propensity to issue bonds / securitise cash flows where possible - Corporates looking for longer commitments Principal market indicators Interest rates (including forward rates, credit spreads and swap spreads), bond yields, inflation, money supply data Implications of zero or near zero interest rates Challenges and opportunities in the new financial landscape Market analysis - key global and regional factors How changes to economic indicators affect markets: theory and practice Yield curves, the term structure of interest rates and their significance in market analysis Interpreting the term structure of credit spreads and CDS spread Swap spread data and the measurement of counterparty risk Understanding market risk: using and understanding the limitations of volatility analysis Foreign exchange, interest rate and commodity markets: overview and synthesis Introduction to the characteristics and uses of derivatives in financial markets Applications of derivatives for corporate banking clients Organisational issues and challenges of using derivatives in the corporate world - Culture – overcoming derivatives’ “bad press” - Familiarity – increasing the understanding of corporate treasurers Understanding the regulatory environment - Developed markets - Emerging markets - The role of ISDA documentation in global financial markets Corporate treasury risk analysis and management Identifying and measuring risk Value-at-Risk (VaR) measures Counterparty risk and Credit Valuation Adjustment (CVA) Market risk and volatility measures Operational risk Inadequate internal controls Valuation risk and accounting best practice using FAS 133 and IAS 39 Regulatory risk Liquidity risk and its trade off with other sources of risk Contractual and general legal risks in different jurisdictions Settlement (Herstatt) risk Tailoring solutions to mitigate and minimise corporate treasury risk Risk measurement: a critical review of methods and models Understanding the Risk Management Matrix Dimensions of risk, including interest rates, inflation & commodity prices Liquidity Asset / liability mismatching, including cash flow ladder analysis Main participants in derivative markets Hedgers Speculators Arbitrageurs Benefits and drawbacks of using derivatives for exposure hedging Day 2 Application of interest rate derivatives and options in a corporate environment The key role of the forward yield curve in providing consensus market forward rate pricing data Using the forward curve and binomial models to price Forward Rate Agreements Tailoring interest rate solutions: benefits and disadvantages of using forwards compared to futures Swaps - Generic concept of a swap and potential applications for corporate treasurers - Interest rate swaps: principal structures and pricing models - Benefits and disadvantages of plain vanilla interest rate swaps - Assessing counterparty and other risks of interest rate swaps - The key role of ISDA documentation and Credit Support Annexes (CSAs) Principal interest rate swap structures used in corporate treasury management - Amortizing, forward-start swaps - Basis swaps and Asset swaps Tailoring solutions for corporate clients by enabling them to match asset and liability cash flow structures Case Study: Structuring an interest rate swap solution for a real-life client scenario Options Review of basic option terminology and pricing models used in different markets Single option pay-off profiles: the two sides of call and put options Implications for risk management of counterparties writing options Interpreting the Greeks (Delta, Vega, Theta, Gamma and Rho) what do they tell us about value and hedging effectiveness Interest rate caps, floors and collars: structure, pricing parameters and application Swaptions structure and applications for corporate treasurers Selling optionality: overcoming prejudices and demonstrating fair pricing Case Study: Designing structures to meet a corporate treasurers needs in hedging actual or contingent series of cash flows. Discussion of different scenarios and the advantages and disadvantages to the client of using FRAs, swap structures and options on interest rates to provide appropriate hedging protection against and adverse outcome Day 3 Foreign currency derivaticves and strategies Overview of the structure of global and local FX markets - Free floating major currencies and principal FX traded pairs - Pegged local currencies and implications for corporate treasurers Principal players in FX markets - Trade financiers - Hedgers - Speculators High yield products based on FX structures: - Dual currency deposits (DCDs) - Mechanics and implicit and explicit risks Hedging exposures using FX products - Pricing techniques and regional conventions on FX forward contracts - Pricing FX forwards Non-Deliverable Forward (NDF) market: purpose, applications and benefits NDF pricing examples - To full maturity - Extended / shortened maturities Comparisons the payoff profile of NDFs and FX forwards Discussion: Advantages/ disadvantages of NDF’s and associated risk FX Swaps Introduction to currency swaps FX swaps and Cross Currency Swaps: purpose and applications for corporate treasurers Advantage and disadvantages of different structures Understanding the risks inherent in currency swaps Non Deliverable Swaps (NDS) and their role in emerging market non-deliverable currency markets Discussion: Application of currency swaps for corporate treasurers FX Options Key pricing factors and terminology and in FX options Principal FX option structures and associated hedging strategies - Plain vanilla - Exotics Quantos and the applications of structures with varying notional amounts Advanced FX options: barriers, knock-in, knock-out and potential applications Misuse of complex FX structures: pure speculation scenarios Discussion: Potential options in risk management of clients’ exposures Case Studies: The class will analyse two case studies; one involving mainstream, free-floating currencies and the other involving a local currency pegged to the US Dollar. They will be asked to identify and quantify the risk and to discuss potential solutions from the range of FX solutions covered. The class will then be divided into teams and asked to give a brief presentation on their findings after which feedback will be provided. Day 4 Commodities markets Evolution and development of global commodities markets Principal global commodities markets and trading patterns Commodity forwards and exchange traded futures and options contracts Market participants: underlying objectives and trading behaviour Commodity options: principal types and pricing dynamics Potential role of commodity-based structured solutions in corporate treasury management Understanding the client’s needs and designing solutions for hedging and investment purposes Creating a client derivative proposal In this module, we will discuss the important components of any derivatives offering proposal including: Review of market conditions Review of client situation, including main risk exposures including sensitivity analysis Current risk management strategy and hedging instruments in use Implementation and pricing issues, including documentation and valuation models Case study and Presentations: Study Part I – Putting it all Together: Creating a Client Global Markets and Derivatives Proposal Participants will now develop and deliver a comprehensive derivatives offering proposal for a corporate client with specified risk exposures to include: Market review Summarising exposures using a risk management matrix Interest rate, FX, commodity risk management strategies Interest rate, FX, commodity enhancement opportunities Alternative structured product solutions Implementation plan, including risk monitoring and valuation tools Study Part II – Presentations Participants will now deliver their comprehensive derivatives offering proposal for the company Course summary and close
There are no reviews yet.

Share your review

Do you have experience with this course? Submit your review and help other people make the right choice. As a thank you for your effort we will donate £1.- to Stichting Edukans.

There are no frequently asked questions yet. If you have any more questions or need help, contact our customer service.