Interest rate and FX hedging for Greater Manchester Waste Authority
Case studies

Interest rate and FX hedging for Greater Manchester Waste Authority


A UK PPP waste transaction required hedging to cover interest rate risk on floating commercial bank debt with a syndicate of six banks. The project also faced considerable capex FX risk in EUR.

The public authority (PA) procuring the deal appointed JCRA as an independent derivatives expert to achieve the following objectives:

  • Drive value for the PA by competing the execution and credit appetite for the interest rate and FX hedging between the most competitive bank pricing.
  • Manage the hedge execution process to ensure the competed pricing was maintained at FC.
Our Approach

JCRA approached the banking group to assess each banks’ appetite to execute the interest rate hedging and novate the executed hedge to the remaining lending banks.

Simultaneously, JCRA requested that each bank submit their best pricing based on the market EURGBP forward for the required EUR capex.

For both the IRS and FX hedging we conducted a competition to establish best pricing.

Once the best execution pricing had been established we worked with the PA, its financial advisers and the projects sponsors to develop a robust execution protocol and set up a series of dry-runs to ensure the FC process was smooth, transparent and did not disrupt the market at execution.


Working with the PA, the PA’s financial adviser and the syndicate banks we achieved the following:

  • Implementation of an effective and cost efficient hedging strategy for the required interest rate and FX derivative hedging
  • Competitive and best value execution pricing at FC for both IRS and FX hedges
  • Simple and transparent execution procedure

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