Print Register
Facebook Twitter

Treasury Products and Functions - Money and FX Markets, Derivatives and Structured Deals

Duration: 3 days
  • Loans and Credit Facilities
  • Money Market Instruments
  • Bonds, Covered Bonds and CoCos
  • Repos, Reverse Repos and Securities Lending
  • The Libor and the OIS Market
  • Foreign Exchange Products
  • Derivatives and Structured Products
  • Clearing and Reporting under EMIR 
The objective of this seminar is to give you a highly practical guide to treasury products and their uses in the day-to-day financing and risk management operations of industrial corporations and financial institutions.

After a general introduction and overview, we present and explain the range of loan and credit facilities available for cash management and funding. These facilities include (interbank) borrowing and lending, syndicated loans, underwriting facilities and MTN-programs.

We then look at the market for negotiable money-market instruments, including commercial paper, certificates of deposits, and treasury bills. In each case, we explain how they are priced and traded. We also cover bonds, repos and reverses and their uses.

We then turn to the FX markets. We explain how these markets work and how FX products are used for financing, investment and risk management purposes. We explain different approaches to hedging, including cash-flow hedges, rolling hedges, cross hedges and proxy hedges using spot and forward FX contracts.

Furthermore, we give a thorough introduction to derivative products such as FRAs, swaps, overnight index swaps, interest rate and FX options, and explain how these products are used to hedge repricing risk, cash flow risk and fair value risk. We also look at how “structured products” can be used to obtain “yield enhancement”, to reduce financing costs, or for the indirect hedging of financial and commodity risks.

We give an overview of different mechanisms and systems used for trading, clearing and settlement of transactions in treasury products. We also look at some of the accounting, documentation and regulatory issues involved in using treasury products, including the use of master agreements and the clearing and reporting needs under the EU (EMIR) and US (Dodd-Frank) regulations.  

Day One

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00 Introduction to Treasury Products

  • The Role of the Treasury Function
  • Overview of Treasury Products and their Uses

Loans, Credit Facilities and Money Market Instruments

  • How the Money Markets Work
    • Market participants, terminology, price dissemination, trading systems, …
  • Traditional Bank Loans, Credit Facilities and Syndicated Loans
  • The Interbank (Libor) Market
    • Basic Products in the Libor Market
    • The Future of Libor as a Benchmark (Libor Fixing Scandal)
    • OIS and Repo Rates as alternatives to Libor
  • Negotiable Money Market Instruments
  • Commercial Paper, Certificate of Deposits, Treasury Bills
  • Repos and Reverse Repos for Financing and Investing

12.00 - 13.00 Lunch

13.00 - 16.30 Capital Markets

  • Introduction to Bonds and Bond Markets
  • Using Bonds for Corporate and Bank Financing
    • Bond pricing in the primary and secondary markets
  • Using Covered Bonds
  • Contingent Convertibles (CoCos)
  • Collateral Management
  • Investing in Bonds
    • Treasury objectives of investing in bonds
    • How to deal with the current Low-Yield Environment
  • Bond portfolio management
  • Exercise 

Day Two

09.00 - 09.15 Recap

09.15 - 12.00 Foreign Exchange Products

  • How the FX markets work
    • Market participants, terminology, price dissemination, trading systems, clearing and settlement
  • The Spot FX Market
    • Quoting conventions
  • Forward FX Transactions
    • Outright forwards, spot/forward and forward/forward transactions
  • Liquidity Issues in the Current FX Markets and the Importance of Basis Spreads
  • Cases:
    • Hedging FX exposures with FX forwards
    • Hedging economic FX exposure
    • Hedging commercial cash flows

12.00 - 13.00 Lunch

13.00 - 16.30 Derivate Treasury Products

  • Forward Rate Agreements and Forward Spread Agreements
    • Mechanics, pricing, uses in Treasury
    • Creating synthetic FRAs via the FX market
    • Case Study: Locking in Funding Costs with FRAs and FSAs
  • Swaps
    • Interest rate swaps and their mechanics
    • Cross-currency swaps and their mechanics
    • Dollar liquidity and basis swap spreads
    • Asset swaps and liability swaps
    • Case study: Issuing synthetic bond and calculating the all-in costs
    • Case study: Cash flow and fair value hedges with swaps
  • Cases and Exercises

Day Three

09.00 - 09.15 Recap

09.15 - 12.00 Derivate Treasury Products (Cont’d)

  • Interest Rate Options
    • Caps, floors, swaptions and their mechanics
    • Case: Managing interest rate risk on variable rate debt using swaps, caps or collars
  • Other Derivate Treasury Products (Futures, Currency Options,..)
  • Documentation, Regulatory and Accounting Issues in using Derivates
    • Using master agreements
    • Accounting treatment: FAS 133 & IAS 39
    • Capital Charges
  • Regulatory Issues
    • Clearing and Reporting under EMIR and Dodd-Frank
  • Exercises

12.00 - 13.00 Lunch

13.00 - 16.30 Structured Treasury Products

  • Motives, Advantages and Disadvantages of Using Structured Financing Products
  • Building Blocks of Financial Engineering
  • Issuing Structured Bonds and Notes
  • Examples of Structured Notes and Bonds
    • Reducing financing costs by issuing inverse floaters, bear notes etc.
    • Managing interest rate risk by issuing capped floaters etc.
    • Managing commodity and currency risk by issuing commodity-linked notes
    • Managing credit risk by issuing credit-linked notes
  • Asset-Backed Financing
    • Securitizing receivables
    • Asset-backed commercial paper programs
  • Exercises

Evaluation and Termination of the Seminar