FX Currency Hedging
GPS will develop a customized fx hedging strategy that meets your company’s unique operations.
Companies need to define risks in order to create a fx currency hedging program that is effective and efficient. GPS helps identify and define exposures, and then assists you in creating a customized fx hedging program that will mitigate these exposures.
GPS's complete foreign exchange risk analysis identifies currency risk by scope and type of exposure, such as: Balance Sheet, Cash Flow, Inter-company Loan, Net Investment, or Forecasted Transactions. GPS will also assist your management team in deciding whether qualifying for fx hedge accounting treatment under FAS 133 and 52 is applicable.
GPS follows a few basic steps in creating your customized fx hedging strategy:
CASE STUDIES
BALANCE SHEET HEDGING
Client Challenge:
- A rapidly growing international company was expanding in four countries and faced payroll, rent, sales and other expenses denominated in local currency compared to cost of goods sold calculated in U.S. dollars.
GPS Personalized Solution:
- GPS's senior foreign exchange experts completed a detailed assessment, including balance sheet optimization through forward and SPOT contract strategies and through the writing of a Foreign Exchange Policy (FAS 133 regulation).
GPS Results:
- Annual savings of $2 million.
- Eliminated risky currency fluctuations affecting balance sheet.
- GAAP compliance through Foreign Exchange Policy.
FORWARD XTRA™
Client Challenge:
- A U.S. company was transferring over $1 million weekly to its Mexico manufacturing facility and was exposed to adverse fx currency fluctuations.
GPS Personalized Solution:
- GPS implemented a layered hedging strategy that enabled the client to recognize a 4% discount on its average weekly SPOT price.
- GPS executed Forward Xtras™ to capture the upside of currency fluctuations while eliminating the SPOT rate risk for the client.
GPS Results:
- Annual savings exceeded $3 million.
- Eliminated downside risk created by currency fluctuations.
Contact Us to learn more about why we are the leader in customized hedging solutions for middle market corporations.