Best has observed that some insurers have begun to prepare for the impact of a rising interest rate environment by using hedging techniques such as Treasury locks
or by reducing the average duration of their bond portfolios.
In addition to the current interest rates that are attractive compared to historical levels, we were able to lower our effective interest rates from the coupon rates quoted above, by hedging about 75% of our interest rate exposure through a series of Treasury Locks
executed over the last 30 days," said Jerry Benkert, Vectren's Executive Vice President and CFO.
As a result of the payment of the redemption premium and the settlement of the Treasury locks
, the Company expects to recognize an aggregate loss on extinguishment of debt during the fourth quarter of 2010 of approximately $78.
The Company continues to exclude the gain on settlement of treasury locks
for the restated 1999 FFO.
Swaps associated with underwriting securities may also be exempt: While legislative language is murky, it may be that fixed to floating swaps associated with the issuance of debt or Treasury locks
or forward starting swaps associated with a future issuance may be exempt or may simply be suggesting that a "when issued" security not be classified as a derivative.
A) - The loss on unused treasury locks
resulted from the termination
The company has entered into $875 million of treasury locks
to hedge against interest rate increases.
shareholders, gain (loss) on sale of assets, loss on treasury locks
31, 1998 its negative marked-to-market on its portfolio of forward Treasury locks
shareholders, loss on treasury locks
, loss on relocation of
Additionally, the company has no forward equity contracts, treasury locks
or similar derivative instruments that could result in a loss to the company.
The trust also announced that it has entered into interest rate hedging agreements known as Treasury locks
with Merrill Lynch and Chemical Bank, which have the effect of fixing the base rate for the trust to issue debt within the next nine months with a principal amount of $100 million and a term to maturity of seven years.