South African corporates expect to sign CSAs

Power giant Eskom and South African Airways want to cut hedging costs

Signing a contract

South African corporates – including giant state-owned power utility, Eskom – expect to start posting collateral when trading over-the-counter derivatives, in a bid to bring down the cost of hedging. Speaking at the Risk & Return South Africa conference in Cape Town last week, representatives from Eskom and South African Airways both said they were seriously considering signing credit support annexes (CSAs), which govern collateral posting in the OTC market. The vast majority