Deal misfires expose risk of contingent hedging

Banks hike premiums on deal contingent swaps amid Brexit uncertainty

Banks involved in a deal contingent swap with a counterparty named after the Greek god of the sun might have guessed there was a risk of getting burnt.

When Apollo Global Management agreed a £3.3 billion ($4.1 billion) purchase of UK packaging company RPC Group in January this year, the US private equity firm hedged its foreign exchange exposure with five investment banks, according to sources familiar with the deal.

But the surprise failure of the takeover in March left the five banks facing

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