Create an Allocation

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

Contact your Finance Active consultant to:

 

Open the Transaction to Allocate
  1. Log in to your Fairways Debt account and select a customer account, if relevant.
  2. Navigate to Applications Applications.png > Debt & Derivatives.

In this example, we log in to the Main City account.

Portfolio_EN.png

  1. Open the transaction to allocate:
    1. Via a portfolio: Select the relevant portfolio, and click the relevant transaction.Portfolio_2_EN.png
    2. Via the Hedging module: Navigate to Hedging, and click the relevant transaction in the Associated/Dissociated lists.Hedging_2_EN.png

 

Create an Allocation
  1. Navigate to Hedging.
  2. Click Create Allocation.

Hedging_EN.png

  1. Complete the form with all relevant details.

Note: Fields marked with an asterisk * are mandatory.

Field

Description

Derivative

Hedging transaction.

Notes:

  • If you create an allocation from a derivative profile, that derivative details will be preselected and the field not editable.
  • The derivative currency must either match the hedged transaction currency or the account currency.

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

  1. Click Apply.

Allocation_Create_EN.png

The allocation displays in the hedged transaction profile...

Allocation_Created_EN.png

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.

Allocation_Created_Derivative_EN.png

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