SSY brokers groundbreaking FFA option deal
SSY Futures has recently brokered a forward freight agreement (FFA) option transaction covering Panamax earnings out to the end of 2012. The deal, fixed between two leading FFA users, has confirmed industry claims that there is appetite for longer-dated settlements.
“This is a defining moment for the FFA markets,” says Mark Richardson, head of SSY Futures, who concluded the trade. “Until now the options market’s forward curve, used to value FFA option transactions, has been priced up to three years forward. Having the ability to trade a full five years out will attract a whole new category of user to the markets.”
Structured finance deals, which are used to fund vessel purchases, often need an element of security provided in terms of future earnings. Having
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