Cotton Price
Risk Management
Jeffrey M. Christian
February 2002
CPM Group
Today’s Presentation
1.
Introduction: History
2.
Introduction: What can be done in cotton hedging
3.
CFC Program
4.
How Field Tests Could Work
5.
Commodity Market Mechanics
6.
Real World Examples
7.
A Proposed Field Demonstration Program for
Commodity Price Risk Management
8.
Cotton Hedging, in detail
9.
CFC Program, continued
CPM Group
Introduction: History
•
•
•
•
•
•
1997: EU started the process of seeking new commodity risk
management regimes.
1998: World Bank published paper, Effective Commodity Price
Risk Management (Akiyama, Christian), and organized the first
commodity risk management roundtable.
1999: World Bank International Task Force on commodity price
risk management formed.
1999: CPM delivers proposals for field tests of hedging programs
to International Coffee and Cocoa Organizations
2001: World Bank ITF refocuses on possible field tests.
2001: CFC commissions feasibility studies on coffee, cocoa, and
cotton hedging field tests.
CPM Group
Introduction: History
• The World Bank and the Common Fund for
Commodities have been seeking to implement
programs to assist in commodity price risk
management – hedging – since 1998 and 1999.
• The CFC and World Bank are moving toward field
tests of a program CPM Group outlined in 1998, using
existing market instruments, dealers, and relationships.
• CPM Group currently is conducting a feasibility study
for the CFC’s program to hedge cotton price risk in
Tanzania, Uganda, and Zimbabwe.
CPM Group
Introduction: What can be done
• The next two slides will illustrate what can be done,
now, using existing market instruments and facilities,
to hedge cotton.
• The key is not to build a new market facility, but to
provide a bridge between agricultural producers in
these countries and international markets, to bring
existing price hedging mechanisms to remote
producers.
CPM Group
One example of a cotton hedge
Participatory Option -- 17 December 2001 for July 2002
Sales Price
80
70
Spot Sales
60
50
40
CPM Group
30
Participatory Option
20
10
0
0 6 12 18 24 30 36 42 48 54 60 66 72 78
Market Price
CPM Group
Another example of a cotton hedge
Participatory Option -- 17 December 2001 for July 2002
Sales Price
80
70
Spot Sales
60
50
40
CPM Group
30
Participatory Option
20
10
0
0 5 11 17 23 29 35 41 47 53 59 65 71 77
Market Price
CPM Group
Examples of cotton hedges
• These instruments may be structured to provide some
flexibility to producers.
• In these two examples, a producer could have hedged
this year’s crop at a minimum price of 36 cents per
pound, and given up 3 cents of any increase over that
level…
• Or, the producer could have accepted a slightly lower
minimum price, at 35 cents per pound, and given up 2
cents of any increase.
• These prices are for deliverable cotton: Producers
prices for seed cotton would be discounted accordingly.
CPM Group
Examples of cotton hedges
• These two examples are real-life cases, structured by
CPM Group in December, 2001.
• These hedges can be executed today, using existing
market instruments, existing market intermediaries,
and existing market relationships.
• There is no intention of building new market
instruments or markets, but simply an effort to build
an efficient, intelligent bridge between producers and
international providers of cotton price hedging
services.
CPM Group
CFC Program
Analysing the Potential for Introducing Market Based
Price Risk Management to Cotton Farmers and/or their
Co-operatives
CPM Group
CFC Program
• The Common Fund for Commodities wishes to develop a
program to bridge the gap between developing nation
commodity market entities and market-center financial
institutions providing hedging facilities.
• The CFC wishes to undertake a series of field tests on
commodities price risk management for such bridge
building.
• First, the CFC wishes to study the potential structure and
mechanics of these field tests.
CPM Group
CFC Program
• The present study is an investigation of the ability, and
potential constraints, to launch field tests of commodity
hedging programs for cotton growers and others in
Tanzania, Uganda, and Zimbabwe.
• The study is to be completed by late May 2002. A second field
research trip by CPM Group will occur in April.
• Other studies on coffee and cocoa are underway
simultaneously.
• A Regional Workshop will be scheduled, probably in June at
some point in Africa, to outline study results and discuss the
program.
CPM Group
How the Field Tests Could Work
CPM Group
CFC Field Tests -- Needs of System
For this program to work, various conditions need to exist in
the domestic cotton markets:
1. Key buyers of services
2. Domestic intermediaries
3. Legal and regulatory framework
4. Telecommunications infrastructure
5. Providers of hedging services
CPM Group
1. Key buyers of services
• This program depends on finding cotton market
entities large enough to purchase price hedging
instruments, and then distribute them to smaller
farmers.
• Such entities can be farmers, co-operatives, gin mills,
dealers, exporters.
• One key aspect of the program will be to develop a
method of assuring that the benefits of the price
protection program are distributed to small farmers.
CPM Group
2. Domestic intermediaries
• Most likely, domestic banks and other financial
intermediaries will play a role in helping to establish the
bridge between the international market and domestic
producers.
• By providing price insurance, the banks actually also would
be improving the credit worthiness of their small farming
clients.
• These hedges can be tied into input credits.
• These hedges improve the credit worthiness of farmers
seeking micro-finance and other input credits.
• Joint programs with international providers of such hedging
instruments and domestic banks already exist, and can be
used to provide these instruments and services to producers.
CPM Group
3. Legal and regulatory framework
The legal regime must be structured to allow such
transactions to occur.
• Companies must be legally allowed, and able, to buy
and sell commodity options for hedging purposes
overseas.
• Financial market regulations must allow for such
transactions.
• Foreign exchange laws must allow them as well.
• Its both the regulatory regime and the rules by which it
is applied that matter.
CPM Group
4. Telecommunications infrastructure
• Effective communications networks will need to be
developed to handle cotton price risk management on
an on-going basis.
• Reliable telephone, telefax, and e-mail are needed.
• For the field tests, the flow of pricing information and
hedging structures might be rather minimal.
CPM Group
5. Providers of hedging services
• The study is designed to identify as many providers of
hedging services, options, and cotton related financial
services as possible.
• On identification, these financial counterparties will be
invited to participate in field tests.
– Introduced to program
– Review of strategies, systems, networks, operations
CPM Group
CFC Program
• The study over the next three months will examine and
analyze each set of requirements and assess what
obstacles exist to the field test, and whether the field
tests can be conducted in these three national markets.
CPM Group
An Intelligent Bridge
The need is to build a bridge between local growers and
international markets.
• It needs to be an intelligent bridge.
• Technical assistance is needed to make sure the hedges are
optimally structured, and in the best interest of local,
domestic producers and others.
• An honest broker is needed to make sure the program is
optimally run.
CPM Group
An Intelligent Bridge
• Concerns that these complex and powerful financial
instruments could back-fire on producers are correct and
well placed. Attention is needed to risk management steps.
• There have been numerous examples of how managers not
fully understanding the power – good and bad – of options
have suffered large losses. These examples mostly involve
large, presumably financially sophisticated corporations in
Europe, Japan, and the United States.
• So, it is important to build assurances into the cotton
program to protect smaller companies in the three countries
chosen for field tests, and to provide them with adequate
financial advisory services to protect them from such
potentially devastating mistakes.
CPM Group
CFC Program
• The program would use existing marketing instruments,
trading counterparts, and relationships.
• An international organization would provide technical
assistance and serve as the honest broker.
• The international organization would not have any credit
exposure.
• CPM Group-like companies can provide technical assistance in
pricing, placing, and managing hedges.
CPM Group
What Hedging Cannot Do
• It cannot stabilize prices.
• It cannot raise market prices.
• It cannot offer above-market prices.
CPM Group
What Hedging Can Do
• It can raise revenue, both in a given crop year and in
the long-term.
• It can stabilize revenue.
• It can offer above-market revenues in the long run.
• It can provide predictability to revenue, which
means….
• It can enhance producers’ credit-worthiness and ability
to borrow.
CPM Group
Mechanics of hedging
• Dealer or over-the-counter options.
• Zero cost options programs, that provide protection
from lower prices and exposure to higher prices.
• Rarely if ever use futures or exchange traded options.
The futures markets are for the dealers to hedge their
exposure.
CPM Group
Why these services are not provided now
•
•
•
•
•
Credit risks
Profitability issues for hedge providers
Small size of producers
Non-performance
Gap exists
CPM Group
Input credit finance & microfinance
• Ultimately, hedging provides a minimum price assurance for
farmers, co-ops, and others. This should help them in
securing or enlarging their credit facilities with domestic
financial institutions that provide input credits, financing,
and micro-financing.
• There may well be a role in some countries for these local
financial institutions to serve as local distributing
mechanisms for the price risk management services. They
can provide the hedging facilities as part of their overall
lending facility.
CPM Group
Commodity Market Mechanics
The Structure and Function of
Commodity Markets
• Structure
a. Dealer Markets
b. Exchanges
c. Instruments
CPM Group
Instruments
• Spot Sales
• Futures
• Forwards
• Spot Deferred Contracts
• Simple Options
• Compound Options
Fences, Min-Maxes,
Participatory Options
Programs
CPM Group
• Synthetic Put vs.
Participatory Options
• Commodity Swaps
• Commodity Loans
• Short, Medium, and
Long Term Trades
Instruments
Any time CPM Group advises a client on hedging strategies, it
presents a range of instruments, structures, and possible
hedges to it. It assists the client in understanding the risks,
costs, benefits, and rewards of each possible hedge, and in
choosing the most efficacious and suitable hedge. It does not
dictate only one type of instrument to any client. Dealers
invariably offer only one or two options most suitable to
them.
CPM Group
Instruments
The following schematics portray revenue streams for
commodities producers using different sales and
hedging instruments.
Similar comparisons may be done for commodities
consumers.
CPM Group
Spot Sales
Producers selling
on a spot basis are
fully exposed to
rising and falling
commodity prices.
35
Price Received
30
25
20
15
10
5
0
0
3
6
9 12 15 18 21 24 27 30
Market Price
CPM Group
Spot Sales and Forwards
35
Price Received
30
25
20
Forward sales protect
producers from falling
prices, but remove
exposure to beneficial
price developments.
Beneficial Price
Developments
Spot Sales
Forwards
15
10
Adverse Price
Developments
5
Spot sales leave producers
fully exposed to price
variations, good and bad.
0
0 2
4 6 8 10 12 14 16 18 20 22 24 26 28 30
Market Price
CPM Group
Simple Options: Put
35
Price Received
30
25
20
15
Spot Sales
Simple Put
10
5
0
0
3
6
9 12 15 18 21 24 27 30
Market Price
CPM Group
Using puts preserves
exposure to beneficial
price developments and
removes exposure to
adverse price
developments, but puts
cost money up front and
can be expensive.
Compound Options: Collars
Producers lock in a
minimum price received,
and benefit only from
a small portion of any
price increase...
30
Price Received
25
20
Minimum
Price
Received
Spot Sales
Collar
15
10
…while giving up this
exposure to beneficial price
developments if prices rise.
5
0
0 2
4 6 8 10 12 14 16 18 20 22 24 26 28 30
Market Price
CPM Group
Compound Options: Collars
1.
With collars -- which is what banks like to sell -producers get a little slice of beneficial price
developments; the banks get most of it.
2.
CPM Group rarely advises clients to use collars – only
at times of historically high prices when prices seem
overwhelmingly likely to decline.
3.
The credit risks inherent in collars and forfeiture of
upside price exposure simply make these
inappropriate hedges, even if they are the hedges
banks most commonly offer.
CPM Group
Participatory Options
With Participatory Options Programs, producers reverse
the field on banks. The producers get to keep most of the
beneficial price developments, giving the banks only the
thin slice.
CPM Group
Participatory Options Programs
30
Price Received
25
20
…while protecting
against falling
prices,
With POPS, the
producer keeps all
of this if prices rise...
15
and giving away
only a small
amount of
any price rise.
10
5
0
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Market Price
CPM Group
Spot Sales
POPS
Participatory Options Programs
Producers using these options strategies are able to:
• Receive above-market prices for their
commodity over time.
• Protect their operations from sharp decreases in
prices.
• Preserve the ability to receive higher prices, if
prices rise.
• Avoid unlimited and unnecessary credit risks.
CPM Group
Participatory Options Programs
Additionally, hedging with Participatory Options strategies
provides producers and consumers with far better credit
exposure than other hedging strategies.
• The credit risk is reduced to a minimum -- typically 2% 10% of the total value of the hedge -- compared to unlimited
risk with most hedge strategies.
• The credit risk and other risks are known at the time the
hedge is initiated. There are no credit risk surprises possible
later.
• It really is more performance risk than credit risk.
CPM Group
Participatory Options Programs
Additional Benefits
• Properly constructed Participatory Options have no
premium, fee, brokerage commission, or other transaction
cost to hedgers, either at inception or later.
• Since the hedger is paying nothing for this hedge, and only
foregoes a small portion of any price increase, should prices
rise, the risks of non-compliance on the part of small farmers
and others is greatly reduced compared to other hedges.
CPM Group
Commodity Price Risk Management
• Banks and dealers rarely advise clients to use participatory
options or other structures favorable to the clients. They are
too beneficial to clients and do not offer dealers the extra
profit potential they desire.
• It is inappropriate, with a large conflict of interest, for banks
and dealers to advise and structure hedges for their
counterparts.
• Most counterparts rely on their banks and dealers for
strategies.
• Banks and dealers by definition will not advise their clients to
use optimally structured hedges.
CPM Group
Commodity Price Risk Management
Hedging is an on-going process.
It is not a one-time event.
CPM Group
Synthetic Put vs. Participatory Options
Banks try to counter the move to Participatory Options by
selling producers "Synthetic Puts." But these programs cost a
lot to initiate. Participatory Options are better -- with no
premiums and reduced credit risk.
CPM Group
Synthetic Put vs. Participatory Options
110
Prices
Collar
POPS
Synthetic Put
100
90
80
70
60
60
CPM Group
70
80
90
100
110
Revenue Profile of Participatory
Options for Crude Oil Producer
These are the results in a hypothetical study CPM Group did
on oil sales for the World Bank.
40
35
30
$/bbl.
25
20
15
Market Price
Program Revenue
10
5
0
89
90
CPM Group
91
92
93
94
95
96
97
98
Revenue of Participatory Options
Program Relative to Market
The oil producer capped its loss (red) relative to the market,
but had exposure to "all" of the gains (green) relative to the
market if prices fell.
10
8
$/bbl.
6
4
2
0
-2
89
CPM Group
90
91
92
93
94
95
96
97
98
Real World Examples
Real World Examples
These are actual hedges.
These hedges show what client companies of CPM Group
have done, and what other groups could have done
over the past few years, had the bridge been built
between the private sector providers of these services,
and developing country commodity producers and
exports.
CPM Group
Mechanics
• CPM Group advises companies on commodities
hedging programs.
• Some clients ask CPM Group to structure hedges,
which they execute and manage themselves.
• CPM also will execute and manage hedge positions for
clients as their agents.
• Typically, more than one alternative hedge strategy will
be presented at a time, allowing the client to see and
compare the relative costs and benefits of various
strategies, approaches, and instruments.
CPM Group
Coffee Hedge 1
February 1997 for December 1998
Sales Price
400
350
Spot Sales
300
250
200
CPM Group
150
Participatory Option
100
50
0
0 35 70 105 140 175 210 245 280 315 350 385
Market Price
CPM Group
Coffee Prices:
January 1996 - December 1999
Cents/Lb
Cents/Lb
320
300
280
260
240
220
200
180
160
140
120
100
80
60
Jan- Apr- Aug- Dec- Apr- Aug- Dec- Apr- Jul- Nov- Mar- Jul- Nov96
96
96
96
97
97
97
98
98
98
99
99
99
CPM Group
320
300
280
260
240
220
200
180
160
140
120
100
80
60
Coffee Hedge 2
April 2000 for January 2001
Sales Price
180
165
150
Spot Sales
135
120
105
90
CPM Group
75
Participatory Option
60
45
30
15
0
0 15 30 45 60 75 90 105 120 135 150 165 180
Market Price
CPM Group
Coffee Prices:
January 1999 - June 2001
Cents/Lb
Cents/Lb
150
140
130
120
110
100
90
80
70
60
50
40
Jan- Mar- May- Aug- Oct- Jan- Mar- May- Aug- Oct- Jan- Mar- May99
99
99
99
99
00
00
00
00
00
01
01
01
CPM Group
150
140
130
120
110
100
90
80
70
60
50
40
Cocoa Hedge 1
March 2000 for July 2000
Sales Price
1,600
1,500
1,400
1,300
1,200
1,100
1,000
900
800
700
600
600
Spot Sales
CPM Group
Participatory Option
750
900
1,050 1,200 1,350 1,500
Market Price
CPM Group
Cocoa Prices:
January 1999 - June 2001
$/metric ton
1,500
$/metric ton
1,500
1,400
1,400
1,300
1,300
1,200
1,200
1,100
1,100
1,000
1,000
900
900
800
800
700
700
600
Jan- Mar- Jun- Aug- Nov- Feb- Apr99
99
99
99
99
00
00
600
CPM Group
Jul- Oct- Dec- Mar- Jun00
00
00
01
01
Cocoa Hedge 2
May 2001 for December 2001
Sales Price
1,600
1,500
1,400
1,300
1,200
1,100
1,000
900
800
700
600
600
Spot Sales
CPM Group
Participatory Option
750
900
1,050 1,200 1,350 1,500
Market Price
CPM Group
Cocoa Prices:
January 2001 - June 2001
$/metric ton
1,250
1,200
1,150
1,100
1,050
1,000
950
900
850
800
750
700
650
2-Jan 24-Jan 14-Feb 8-Mar 29-Mar 20-Apr 11-May 4-Jun
CPM Group
$/metric ton
1,250
1,200
1,150
1,100
1,050
1,000
950
900
850
800
750
700
650
25-Jun
Key advantages
♦Immediate development, implementation, and operation.
♦Uses existing market instruments and institutions.
♦No government subsidies.
♦Superior price returns compared to non-hedging and
currently typical hedging.
♦Known maximum credit risk at outset.
♦Protection against market shocks.
♦Self-funding beyond start-up, self-insuring, selfsustaining.
♦Low costs to implement, with no operational costs for
governments or users beyond start-up.
CPM Group
Commodity Price Risk Management
The ugly truth of the matter is there are few companies with the
technical expertise, market knowledge, market experience,
and options understanding to effectively operate such
programs.
Banks and dealers simply will not offer such efficient hedges.
Traders trained in banks and dealers do not understand
hedgers’ needs and operations sufficiently to structure
suitable hedges.
Many consulting companies that claim knowledge of options
trading in fact never have managed any trades and lack the
technical experience and expertise.
CPM Group
Cotton Hedges, in detail
This section revisits the two examples of cotton hedges from
the beginning of this presentation, showing how they were
constructed in explicit detail, and comparing how the
revenues that can be earned with these hedges in place
compare to alternative sales methods.
CPM Group
One example of a cotton hedge
Participatory Option -- 17 December 2001 for July 2002
Sales Price
80
70
Spot Sales
60
50
40
CPM Group
30
Participatory Option
20
10
0
0 6 12 18 24 30 36 42 48 54 60 66 72 78
Market Price
CPM Group
Another example of a cotton hedge
Participatory Option -- 17 December 2001 for July 2002
Sales Price
80
70
Spot Sales
60
50
40
CPM Group
30
Participatory Option
20
10
0
0 5 11 17 23 29 35 41 47 53 59 65 71 77
Market Price
CPM Group
Construction of Participatory Option
Participatory Options are constructed by combining three
options.
1. A producer wants to protect against lower prices, so
he purchases a put option.
2. Not wanting to pay cash for the put, the producer
instead pays for it by selling a call option.
3. By choosing the right put to buy and call to sell, the
producer generates a net profit on these two
transactions, which it uses to purchase another put
above these levels, giving it renewed exposure to
rising prices.
CPM Group
Construction of Participatory Option
The first Participatory Option in this presentation was
constructed from three components.
1. The producer bought a put option at 36 cents. It paid
1.68 cents per pound for that option.
2. The producer paid for that put option by selling a
call option at 36 cents, earning it 5.79 cents.
The net of these two transactions was 4.11 cents.
3. The producer used this net premium to purchase a
call option at 39 cents, paying 4.09 cents for it.
The result is a zero-premium option.
CPM Group
Construction of Participatory Option
Participatory Option with 36 cent floor, calculations
1.
2.
3.
Producer buys 36 cent put
Producer sells 36 cent call
Net profit from these two actions
Producer buys a 39 cent call
Net premium is effectively zero
CPM Group
-1.68 cents
+5.79 cents
+4.11 cents
-4.08 cents
+0.03 cents
Construction of Participatory Option
The second Participatory Option in this presentation was
constructed from three components.
1. The producer bought a put option at 35 cents. It paid
1.36 cents per pound for that option.
2. The producer paid for that put option by selling a
call option at 35 cents, earning it 6.45 cents.
The net of these two transactions was 5.09 cents.
3. The producer used this net premium to purchase a
call option at 37 cents, paying 5.17 cents for it.
The result is a zero-premium option. (-0.08 net cost.)
CPM Group
Construction of Participatory Option
Participatory Option with 35 cent floor, calculations
1.
2.
3.
Producer buys 35 cent put
Producer sells 35 cent call
Net profit from these two actions
Producer buys a 37 cent call
Net premium is effectively zero
CPM Group
-1.36 cents
+6.45 cents
+5.09 cents
-5.17 cents
-0.08 cents
Cotton Hedges, Revenue Performance
The next two slides illustrate how the potential revenue
performance of various sales and hedging policies
compare under varying price scenarios.
CPM Group
Cotton Hedges, Revenue Performance
Cotton Hedges -- Competetitve Analysis
December 17, 2001 for July 2002
US cents per pound
Market
Price
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
Spot
Sales
Forward
Sales
Collar
(37-43)
Participatory
Option 35
Participatory
Option 36
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
37
37
37
37
37
37
37
37
40
43
43
43
43
43
43
43
43
35
35
35
35
35
35
35
35
38
43
48
53
58
63
68
73
78
36
36
36
36
36
36
36
36
37
42
47
52
57
62
67
72
77
Notes:
Details of the structures of these positions may be found elsewhere in this presentation, or are
available from CPM Group.
CPM Group
Cotton Hedges, Revenue Performance
Revenue
90
80
Market Price
Spot Sale
70
60
Participatory Option (37)
50
Participatory Option (35)
40
Forward
Collar
30
20
10
0
0
5
10
15
20
25
30
35
40
45
Market Price
CPM Group
50
55
60
65
70
75
80
Cotton Hedges, Revenue Performance
Benefits of participatory options outweigh
those of competing methods of sales and
hedging.
• The participatory options offer superior returns in the
long run. Producers using them retain exposure to
rising prices, while gaining a minimum price for their
product.
• Reduced credit risks. Reduced costs.
• Losses relative to the market are limited on each
transaction; gains relative to the market are unlimited.
CPM Group
CFC Program
CPM Group
CFC Program
• CPM Group provided template proposals and
assistance to the Internation Cocoa Organization and
the International Coffee Organization in November
1999, outlining commodity hedging field
demonstrations.
• CFC in July 2001 issued a request for proposals for
comprehensive studies of the potential for field tests of
commodities hedging programs in three countries each
for three commodities each: coffee, cocoa, and cotton.
CPM Group
CFC Program
1. The CFC has contracted comprehensive studies of the
target country and commodities markets. These
studies will outline in detail the potential program
participants in each country and other aspects of
potential programs.
2. The CFC seeks to launch field demonstrations, to
demonstrate the ability of market participants in
these countries to undertake these hedging programs
themselves directly and immediately.
CPM Group
CFC Program:
Comprehensive Study
Many issues to be explored and delineated:
1. Institutional framework and capacity to initiate and
management such financial trades in target countries.
2. Legal and regulatory framework necessary to allow and
accommodate options trades.
3. Information transmission and distribution.
4. Management of hedging positions during any field test.
CPM Group
CFC Program:
Comprehensive Study
Issues to be delineated:
• What is the potential for introducing commodity hedging
programs into these three countries’ cotton industries.
• What services, instruments, and strategies would work best
for these producers, coops, etc.
• What are the most efficient and effective transmission
mechanisms, market intermediaries to use.
• What actions are needed to develop a program to provide
these services to producers.
CPM Group
CFC Program:
Comprehensive Study
Issues to be delineated (continued):
• What is the institutional, legal, and regulatory framework in
each country. Can commodity options be used in these
countries in cotton. What laws and regulations may need
modification or introduction.
• What safeguards against risks and hazards need to be
implemented to protect these operations from problems.
• How can these field tests be conducted.
• What will these field tests cost in full.
CPM Group
CFC Program:
Comprehensive Study
Actions:
• Identify and develop comprehensive list of potential
hedgers. Contact them and introduce them to program
concepts and structures.
• Identify and develop comprehensive list of potential service
providers. Contact them and introduce them to concepts of
program structure.
• Develop operation for effecting and managing these
programs.
• Develop program to collect information on program
performance.
CPM Group
30 Broad Street, 37th Floor
New York, N.Y. 10004
Telephone: (212) 785-8320
Telefax: (212) 785-8325
E-mail: investmentbanking@cpmgroup.com
Website: www.cpmgroup.com