Derivative Hedging Services

Interest rate derivatives are financial contracts executed between two parties, designed to protect the balance sheet from exposure to changing interest rates. Derivatives have been used successfully for risk mitigation by financial institutions for more than 20 years.

Catalyst Strategic Solutions' Derivatives Hedging Services program guides credit unions through the process of implementing a derivatives hedging program from start to finish. Leveraging experience as an approved vendor under the NCUA’s derivatives investment pilot program, Catalyst Strategic Solutions already has the systems and expertise in place to assist credit unions with implementation.

Derivative Hedging Services include:

  • An initial meeting to discuss credit union objectives
  • Board and management team education
  • Establishment of counterparty relationships and ISDA legal review
  • NCUA application and policy consulting
  • Calculation of risk to be mitigated, earnings impact, transactions strategies/structures/laddering formulation
  • Trade execution with counterparties
  • Credit analysis and daily pledged collateral management
  • Comprehensive ALM modeling with BancWare's Ambit ALM5 model for interest rate risk management and off balance sheet analysis
  • Compliance follow-up and on-going consultation.

For more information about Derivative Hedging Services, visit Catalyst Strategic Solutions' website.