“Obviously, a lot of the risk that is hedged in the market is tied to specific provisions in loans or other underlying financial agreements, and so it’s in some ways a chicken and egg problem. If a corporate is hedging a floating-rate bank loan that is indexed to that same rate, you would say that just matches that index, whether that is overnight derived index or three-month term index. From a risk management perspective, corporates would just want it to be the same index,” says Rob Mangrelli, a director in the global real estate hedging and capital markets team at Chatham Financial in Pennsylvania.
Replacing Libor: Weary Swaps Market Eyes Long To-do List
Replacing Libor: weary swaps market eyes long to-do list
August 16, 2017
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