Hedge Program Design

Interest Rate Swap or Interest Rate Cap?

The goal of a well-designed hedge program is to optimize your risk profile, while balancing the costs of hedging with the benefits of protection.  DAG begins every hedge program assignment with a thorough analysis of the client’s financials and debt pro forma, along with a discussion of risk tolerance and future flexibility requirements.  Based on this evaluation, DAG considers appropriate hedge instruments and structures to fit your unique requirements.

DAG then analyzes the economic benefits and risks of the various hedging instruments and structures in the current market environment.  DAG’s analysis includes:

  • Historical back-testing
  • Hypothetical rate scenarios
  • Extreme-case outcomes and probabilities

DAG utilizes its own real-time analytical software to price hedges.   Using this proprietary tool, DAG values each component part of a transaction, and provides you with the utmost price transparency that is necessary to deliver an accurate cost-benefit analysis and optimal hedge solution.

At this point, DAG develops transaction specifications and contacts potential providers in order to gather competitive bids.  Then DAG helps negotiate favorable terms and pricing to ensure that you get the best deal.

Free Consultation: Hedge Program Design

today to learn how your advisor can design a suitable hedge program to meet your unique hedging needs.

DAG is an independent financial advisor serving the corporate, non-profit, tax-exempt and municipal debt markets.  DAG provides comprehensive analysis, recommendation, and negotiation of appropriate hedge products and structures, providing the client with an optimized risk profile that balances the benefits of protection against the costs of hedging.