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

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: