Credit risk
Emissions education
As the European carbon market continues to grow, so too do some unique challenges: not least the gap between retail and wholesale players and the problem of counterparty credit risk. Oliver Holtaway reports
Clearing service launches for physical power in US
North American Energy Credit and Clearing (NECC), the Clearing Corporation (CCorp) and Atlanta-based commodity-trading platform IntercontinentalExchange (Ice) have launched a physical clearing service for the US energy markets.
The clearing challenge
Growing over-the-counter trade in the energy markets, much of it from hedge funds, coupled with exceptional price volatility, could test the current clearing system to the limit, warns independent consultant Chris Cook
North AmericanEnergy Forum
Leading energy market players discuss market trends, credit risk management and the future of the energy sector market, with a special focus on Canada
Stateside summit
Adding to the success of Energy Risk Europe in March, last month’s Energy Risk USA conference raised some lively debate. ERM, credit risk and the problems facing quant analysts were among the hot topics. Oliver Holtaway reports
Awards
Welcome to the annual Energy Risk awards, celebratingthe talent,innovation and enthusiasm that forms thebackbone of this industry.
Broken promises
Asian countries are now a power in the world’s energy markets, but governmentinterference in tariff structures and shaky sovereign guarantees mean regulatoryrisks forinvestors remain. By Maria Kielmas
Counterparty risk
Eduardo Canabarro, Evan Picoult and TomWilde present a new approach to derivativescounterparty credit risk that can affect utilities using a onefactor conditionalindependence framework, deriving a formula for theratio of ‘expected positive exposure’ to…
Tentative steps
Algeria’s state-owned oil company Sonatrach is about to become the first oil and gas company within Opec to roll out an independent risk management programme to cover its crude oil and gas sales. Stella Farrington reports
Polish power exchange chooses OMX software for trading and clearing
In a move to develop its electricity spot and derivatives market, the Polish Power Exchange (PolPX) will use the Condico system from Stockholm-based OMX, the owner and operator of the Swedish stock exchange.
The swap terminator
Multilateral swap cancellations look set to become commonplace in the energy sector, thanks to a service from TriOptima, which has just terminated its first round of oil swaps for six firms. Joe Marsh reports
Layers of intrigue
The Yukos saga – up to now largely confined to the political and legal arenas – recently took a step closer to the physical oil markets with a $6 billion oil deal between China and Russia. By Stella Farrington
TriOptima trims six companies' oil swap portfolios
TriOptima, a Swedish company dedicated to reducing over-the-counter swap portfolios, has expanded its service into energy. The company has terminated its first group of multilateral OTC oil derivative swaps, with six companies eliminating unnecessary…
Mirant to pay $460m to settle California energy crisis claims
Bankrupt Atlanta-based energy marketer Mirant will pay $460 million to California power utilities and public agencies to resolve claims related to the state’s energy crisis in 2000 and 2001. The California utilities and agencies in the settlement were…
Double exposure
Continuing our series on applications of Monte Carlo simulation to applied problems in energy risk management, Les Clewlow , Chris Strickland , Oleg Zakharov, and Scott Browne look at potential future exposure and the analogous measure of expected credit…
A new breed of bond
Issuance of rate reduction bonds by utilities may be down, but the market is preparing for a surge in new asset-backed securities derived from the stranded cost model. By Catherine Lacoursiere
Bridging the gas gap
Volatility in the natural gas markets shows no sign of any let-up, which means that managing basis risk at Henry Hub continues to spur demand for increasingly innovative derivatives products. Catherine Lacoursiere reports
Fitch to buy Algorithmics
Fitch Group, parent of credit rating agency Fitch Ratings, is to acquire New York-based risk management software provider Algorithmics. The purchase, valued at $175 million, is expected to close in January, said Fitch today.
GE Commercial Finance Energy Financial Services to arrange and underwrite debt
Energy companies now have another option when it comes to choosing who will help finance a project or arrange a debt placement for them. GE Commercial Finance Energy Financial Services is to broaden its role as an equity and debt investor to include…
China Aviation gets six week breather
China Aviation Oil (CAOSCO) has been granted a six week extension by the High Court of Singapore to its deadline to submit its scheme of arrangement restructuring plan, due today. The new deadline is January 21, 2005.
China Aviation Oil ceases oil derivatives trading
China Aviation Oil (Singapore) Corp has ceased all oil derivative trading activities after announcing a $550 million trading loss and seeking court protection from creditors last week, the company said late Wednesday.
Bankrupt Mirant seeks more time to file restructuring plan
Bankrupt US energy marketer Mirant has sought a further 90 days in which to file its plan of reorganisation for emerging from Chapter 11 protection from creditors. It filed the request with the US Bankruptcy Court on Monday, and this would be the third…
CMS Energy to sell $200m of convertible senior notes
CMS Energy intends to offer for sale $200 million of convertible senior notes due on December 1, 2024, but would not reveal the rate of interest they will pay.