The derivatives market is one of the largest, most highly complex markets in the world.  It is also one of the most loosely regulated.  KPM Financial works closely with its clients to ensure that there is complete transparency through the entire process of executing a derivative solution. KPM’s experience in this area runs deep, working with derivatives for decades with some of the world’s largest banks.

How We Work

By using live market data in combination with market-tested and proprietary models, KPM can price any relevant solution within the interest rate derivatives market including (but not limited to):

  • Swaps
  • European and Bermudan Swaptions (including callable and puttable swaps)
  • Caps, Floor, and Collars
  • Knockouts and Knockins
  • Basis Swaps
  • Constant Maturity Swaps

Why Should Banks Hold All The Cards?

KPM believes its clients should have the same capabilities as the banks providing the derivative.  As such, KPM provides:

Education
Every client has its own, unique capital structure and, as such, has a different level of exposure to interest rate hedging. KPM will provide the education desired and/or required to ensure that board members, management, and staff have the desired level of understanding of the mechanics, risks, and benefits associated with interest rate hedging solutions.

Development and Structuring
There are seemingly an infinite number of possible hedging structures that a borrower may implement when taking into account notional, effective date, maturity, amortization, periodicity, day count, security, etc. KPM will assist in the development and structuring of interest rate risk management strategies incorporating borrowers’ objectives, constraints, and risk tolerances.

Document Negotiation
As with structuring, documentation of hedging structures can take on many forms. KPM will assist in negotiating the appropriate documentation including, but not limited to, authorizing resolution, hedge identification/qualification letter, ISDA Master Agreement, Schedule to the Master Agreement, Credit Support Annex, and confirmation.

Pricing Verification
KPM has invested in state-of-the-art technology to assist our clients in pricing and analyzing hedging solutions.  KPM clients know exactly what banks are making on derivative transactions.

Independence
KPM is a fully independent advisory firm. We do not rely on hedging providers, banks, or other advisors for pricing discovery and we are not affiliated with any firms providing derivatives products.