Financial Risk Management
With our broad experience across the loan markets, capital markets and the derivatives markets PegCap is equipped to assist clients and their advisors manage their exposure to financial risk.
Clearly in managing financial risk, knowledge and experience are paramount and with over 25 years working on the trading floors of some of the largest Investment Banks PegCap is suitably experienced to review client portfolios and individual transactions, presented in an easily understandable format.
A risk management framework is extremely important for any client that hedges risks in the financial markets. We work closely with clients to ensure that any interest rate risks, credit risks, counterparty risks, currency risks, inflation risks and other market risks are identified, assessed and hedged accordingly.
Generally a restructuring is needed when a breach of covenant has occurred within a loan or swap document. When this occurs, the lenders will usually work with their borrowers to see what steps can be taken to rectify the situation and this is where we can provide assistance.
Our working knowledge of loan documentation and structuring combined with our ability to value and price the financial instruments used for hedging enables us to work with clients to negotiate terms for revised covenants, loan restructurings and ensuring that out of the money losses on hedging instruments are not crystallised unnecessarily.
When it comes to the renewal of banking facilities, especially for corporates, the old adage that people move house more often than they move bank accounts certainly holds true.
Refinancing or renewal risk can be particularly difficult, especially in the current financial crisis where liquidity is a scarce commodity, the cost of funds has increased markedly and where interest rates are artificially low.
We can help navigate the entire process reviewing financial models, the loan and swaps documentation and advising on the most appropriate hedging strategies.