Hedging in Fairways Debt presents the relationship of the actual debt and the risk hedging transactions.
Create an allocation to build the relationship between the debt and the hedges.
Note: You can create an allocation for:
- Loans
- Derivatives
- Securities
Prerequisites
- Enable the Hedging module (contact your Finance Active consultant)
Open the Transaction to Allocate
- Log in to your Fairways Debt account and select a customer account, if relevant.
- Navigate to Applications
> Debt & Derivatives.
In this example, we log in to the Main City account.
- Open the transaction to allocate:
- Via a portfolio: Select the relevant portfolio, and click the relevant transaction.
- Via the Hedging module: Navigate to Hedging, and click the relevant transaction in the Associated/Dissociated lists.
- Via a portfolio: Select the relevant portfolio, and click the relevant transaction.
Create an Allocation
- Navigate to Hedging.
- Click Create Allocation.
- Complete the form with all relevant details.
Note: Fields marked with an asterisk * are mandatory.
|
Field |
Description |
|---|---|
|
Derivative |
Hedging transaction. Notes:
|
|
Hedge date |
Start date of the hedge. This date must be included within the periods of the derivative and hedgeable transactions.
|
|
Available Notional |
Remaining amount of the hedging transaction that can be allocated: Derivative Notional - Current Allocated Amount Note: The allocation remains active even when the transaction matures, i.e. the available notional does not update even though the hedged transaction matures. For example, a derivative matures in 2050 and fully hedges a transaction that matures in 2025. Even from 2026, the derivative's available notional remains 0. |
|
Current Allocated Amount |
Amount of the hedging transaction that has been already allocated: Derivative Notional - Available Notional |
|
Hedgeable |
Transaction to hedge. Note: If you create an allocation from a non-derivative profile, that transaction details will be preselected and the field not editable. |
|
Hedged Amount |
Amount of the hedged transaction to hedge. |
|
Unhedged Amount |
Remaining amount of the hedged transaction that can be hedged. |
|
Hedged Ratio (%) |
Ratio between amount to hedge and outstanding balance at the hedge date: Hedged amount / Outstanding balance at hedge date * 100 |
- Click Apply.
The allocation displays in the hedged transaction profile...
The graph shows the allocation percentage, the current interest rate of the transaction and the current rate including hedging transactions to view the impact of hedging transactions.
... and also in the hedging transaction profile.