Swap Advisory Services

SJ Advisors specializes in structuring, modifying, and terminating interest-rate swaps, option-based features of interest rate swaps, and related hedging products, such as caps and floors. This highly technical area requires specialized systems and knowledge. We can help demystify the complexities of swaps so that our clients understand the risks and market opportunities with our Swap Advisory Services.

Interest rate swaps have been misunderstood, yet remain a suitable product for many situations. We can help you understand the pros and cons of synthetic versus traditional structures and decide whether they make sense for your institution and financing.

SJ Advisors has assisted clients with implementation of the ISDA Protocols under the Dodd-Frank Act. We have also acted as an expert witness and have helped clients work through issues caused by defaulting swap counterparties.

Our Swap Advisory services include:

• Structuring swaps, analyzing scenarios, and assessing risks / benefits
• Identifying and selecting swap counterparties
• Evaluating and negotiating proposals to achieve the best rates and terms
• Reviewing and negotiating ISDA swap documents
• Validating and negotiating swap rates and termination values
• Providing pricing reports, certificates, and presentations
• Managing timelines to ensure on-schedule execution
• Conducting periodic swap portfolio reviews

How we make a difference:

• Analyzed, negotiated, structured, and priced or terminated more than 100 swap transactions, generating measurable PV cost savings for clients:
  • Saved $5.5 million on a $200 million deal involving multiple exotic terminations and several new swaps.
  • Saved $220,000 on a $50 million swap transaction
  • Saved $1.0 million on a $90 million swap termination.
  • Saved $300,000 on an $8 million swap restructuring.
• Found an innovative way to overcome obstacles and achieve a swap restructuring to accomplish the client’s objectives while accommodating the dealer’s credit constraints.
• Framed options and assisted with the early termination of numerous swaps affected by a defaulting counterparty.
• Discovered and corrected swap structuring errors, which improved the hedging performance and avoided critical cash flow shortfalls in a deal with highly constrained repayment ability.