Balance Sheet Hedging Client Example

BALANCE SHEET HEDGING %24 GPS engaged with a multi-national company while in a trial period they were in with an FX software provider. After learning about GPS and wanting to alleviate the sting of a 10% FX Loss, the Company decided to proceed with FXpert. Treasury Solution: The company has a 3 person team that is doing everything from insurance to FX and is spread very thin. GPS helped identify four problem areas where we could streamline processes and simplify the management of the overall exposures. Timing Trade Efficiency Pricing MTM Rates Timing Bad data in means bad data out. Trades were not being posted in the system in time for reports to be generated accurately. GPS worked directly with the client to help identify entities and personnel who could be more efficient in providing data in a timely manner. In order to run an effective balance sheet hedging program; all entities need to be on the same page. Trade Efficiency Due to the size and volume of the balance sheet hedge, some currency pairs were left out of the hedges. This was simply because it was too overwhelming and complicated to manage all of the exposures. FXpert automatically uploads data pulled from the client's ERP system, providing GPS with all data needed to update exposures as often as needed. What was taking the client hours to complete with the FX software provider's trial, GPS effortlessly can complete with the push of a button. GPS was able to pull in all exposures and hedge all material currency pairs. Pricing After GPS further looked at The Company's FX pricing, we found a significant savings that GPS could provide. GPS keeps client rates in line with the market and values the fact that we save our clients money and provide fair pricing on every trade. MTM Rates At GPS, we see ourselves as an extension of your treasury team. This is your ship. We have just built the tools that will simplify your FX exposure management. Our services provide an all-encompassing solution to an overwhelming treasury task. We are able to identify and protect exposures that might be overlooked or dismissed, because it is too cumbersome to manage internally. We provide clients with the tools necessary to succeed in minimizing P&L exposures, giving them the time to focus on other areas to better their competition. 10mm EUR Adjustment P&L Noise ERP Booking Rate 1.3526 $13,526,000.00 Spot Rate 1.3595 $13,595,000.00 ($69,000.00) Adjusting Hedge Rate 1.3603 $13,603,000.00 ($8,000.00) Total P/L Noise ($77,000.00) 10mm EUR Adjustment P&L Noise GPS Rate File Rate (ERP Booking Rate) 1.3595 $13,595,000.00 $13,595,000.00 $13,595,000.00 Spot Rate 1.3595 $0.00 Adjusting Hedge Rate 1.3595 $0.00 Outcome 90 At GPS, we see ourselves as an extension to your treasury function. This is your ship. We have just built the tools that will simplify your FX exposure management. Our services provided an all-encompassing solution to an overwhelming treasury task. We were able to identify and protect exposures that were previously overlooked or dismissed, because it was too cumbersome to manage internally. We provided the client with the tools necessary to succeed in minimizing P&L exposures, giving them the time to focus on other areas to outsmart the competition. GPS