Commodity Risk Management
The commodity swap is a derivative financial instrument for exchange of payments, based on an agreed notional quantity of the raw materials at future dates which are determined at the execution of the transaction. The objective is to avoid undesirable market variations of the price of the commodity price by fixing it. In the case of a commodity swap deal, one party makes fixed payments, the other – floating payments, based on a defined index, futures or other reference price.
The Bank offers two types of commodity swaps, depending on the reference price – Asian and European. The reference price is the average reference price for the period in the case of an Asian swap and the price at maturity in the case of an European swap.
Terms of the transactions: Up to one year and longer term under certain conditions.
Currency: The currency of the offered commodity swaps can be EUR or USD, depending on the currency in which the commodity is mainly traded.
Commodities: The commodities, which can be hedged are industrial metals (copper, zinc, aluminum, lead, steel, nickel), precious metals (gold, silver), energy products (petrol and gas) and grains (rapeseed, wheat, corn, maize), as well as sugar, cocoa and others.
Objectives: The commodity swap is used for hedging exposures towards exchange traded commodities.
Treasury Sales Department
Deyan Mankovski – Director Treasury Sales Department – 02 80 10 862
Hristo Sugarev – Head of Asset Management Unit, Treasury Sales Department – 02 93 91 133
Ivelin Ivanov – Senior Dealer, Treasury Sales Department – 02 93 91 365
Martin Georgiev – Dealer, Treasury Sales Department – 02 97 66 234