I - Introduction

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• Documentation: present at each stage of the hedging process

• The documentation package (Termsheet, FBF/ISDA, credit agreement, intercreditor agreement, confirmation of hedging derivatives, etc.)

• Objectives to keep in mind when reviewing the documentation

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II - Structuring: Hedging objectives and covenants

 

• The hedging strategy: key points of attention

•  Choice of hedging instruments

• Hedging tunnel

• Choice of hedging banks

      Market practice and possible deviations

      The case of orphan swaps

       Waterfall

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III - Execution of the hedging strategy

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• Onboarding: a question of anticipation

       KYC

       LEI

• MIFID

• EMIR

• Execution protocol

       Timing

       Procedures with rate/profile iteration

       Rate index

• Confirmation of the transaction

       Under FBF or ISDA master agreement

       The case of the long form confirmation

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IV - Management of the hedging derivatives

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• A long lasting relationship with the counterparty: ISDA, FBF, DRV

• ISDA wording

       Additionnal termination event

       Affected party

      Termination balance

       Replacemene value

• Examples of Additionnal termination events

• Usual cases (change of control; illegality)

• Specific cases (transfer, early repayment, over-hedging…)

• Clauses in case of disappearance of the benchmark

• Events of default

 

V - Prehedging documentation

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• Collateral for prehedging instruments

• The specific case of contingent prehedging (By swap or option)

• Anticipating transforming the pre-hedge into the final hedge

 

VI- The Termsheet

 

VII- Questions and discussion 

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Note that each training session will include a MCQ to validate the knowledge acquired.

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