Swap Consulting :: Swap Policy Management

CDR has extensive experience in developing hedging policies and we feel it is always beneficial for an issuer to have a derivative product policy in place. If nothing else, it provides a framework for the various decisions and aspects of swaps (and related products) that must be addressed and decided on. Swap policies should cover important items including authority to enter into agreements, purpose/conditions of use, risk factors, economic analysis and savings, legal provisions, monitoring, accounting considerations, and reporting. Furthermore, the quality of an issuer’s swap management policies and procedures has a 35% weight in Standard and Poor’s Debt Derivatives Profile (“DDP”) score, which provides the public finance market with a simple measure that translates the intricate municipal debt-related derivatives exposure into an understandable measurement of risk.