Risk Reduction for Energy Project Sponsors Through Synthetic, Revenue-Neutral Diversification
Financial institutions and insurance companies account for 96% of the activity in the $4.8 trillion credit derivatives market while corporations account for a mere 4%. This article makes a case for? synthetic, revenue-neutral diversification? as a method for energy firms to manage the credit risk in their long-term power-purchase agreements (PPAs). Synthetic, revenue-neutral diversification involves a firm buying insurance on assets in its portfolio and paying the associated insurance premium by simultaneously selling insurance to another firm, thus enabling it to avoid any cash expense. The primary objective of synthetic, revenue-neutral diversification is implicitly to change the firm?s asset portfolio and to increase diversification without reducing the firm?s revenues. In an example, two independent power producers use credit derivatives to diversify the geographic exposures of their PPA portfolios, thereby reducing their expected losses, improving their credit ratings, and lowering their cost of borrowing.
Implementing Credit Derivatives
Preface. Introduction. The Structures. Legal and Regulatory Aspects (by Claude Brown of Clifford Chance). Analysis of Credit Spreads. Revenue-Neutral Diversification. Examination of Term Sheets. Credit Derivatives and the Repo Markets. Collateralized Bond Obligations. Locating the CD Function within a Bank. Credit Risk Management in Asia. CreditMetrics. CreditRisk+. Credit Derivatives and Bank Loans. Creation and Analysis of Structured Credit Derivatives. The Valuation of Credit Derivatives. Analysis and Pricing. Glossary. Index.
The development of biological systematics : Antoine-Laurent de Jussieu, nature, and the natural system
A reevaluation of the history of biological systematics that discusses the formative years of the so-called natural system of classification in the eighteenth and nineteenth centuries. Shows how classifications came to be treated as conventions; systematic practice was not linked to clearly articulated theory; there was general confusion over the "shape" of nature; botany, elements of natural history, and systematics were conflated; and systematics took a position near the bottom of the hierarchy of sciences.