Centrus advises ESB on £550m multi-tranche derivative portfolio

Transaction Overview

ESB engaged Centrus to support in formulating its strategy to manage inflation risk on certain UK assets, particularly its existing UK RPI derivative portfolio.

This involved dealing with the potential restructuring, extending or removing of mandatory breaks, assessment of counterparties and the delivery and execution of same.

Centrus’ Role

  • Delivery of inflation risk analysis and development of strategy.
  • Development of options analysis including market survey and market analysis and
  • Recommending the most appropriate and cost-effective strategy taking into consideration ESB’s risk appetite, liquidity, market dynamics and various stakeholder consideration.
  • The final outcome was an optimised restructure that met the clients’ objectives, managed associated risks and was delivered in a timely manner through a fair and transparent process.

Key aspects where Centrus added value included: 

  • Provided analysis on various market aspects such as LIBOR reform and RPI to CPI transition.
  • Coordinated all commercial aspects of transaction across a large number of counterparties.
  • Ensured appropriate level of competitive tension matched with all party satisfaction.
  • Utilised market knowledge to structure final position which optimised overall pricing.
  • Completed the final transaction within 1 day across all tranches and counterparties.

For more information, please contact Mark Taheny, Director – Centrus.

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