1. FX Volatility and Risks to Your Business
October 2016

2.  The Foreign Exchange Market
• How does this impact your business
 Volatility and Risks to your Business
 Managing the Risks
• Understanding your FX Risks
• Identifying your Exposures and Setting your Objectives
• Hedging Strategies
• FX Products
 Case Study
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3. The Foreign Exchange Market
3
 Trading in foreign exchange
markets averages over $6
trillion per day
 The US dollar (USD) remains
the dominant vehicle
currency; it is on one side of
87% of all trades.
 The euro (EUR) is the second
most traded currency, with
33%.
 Japanese yen (JPY) accounts
for nearly 25% of all trades,
followed by GBP and AUD.
 Mexican peso (MXN) and
Chinese renminbi (CNY) are
the most traded emerging
market currencies.
Source: BIS Triennial Central Bank Survey (September 2013)
FX market turnover by currency and currency pairs There are several
factors that influence
foreign exchange
rate volatility:
 Interest rate
differentials
 Central Bank policy
(actual vs expectation)
 Economic data
 M&A transactions
 Market sentiment
 Technical & Speculative
driven flows
 Politics
 Natural Disasters,
Conflicts etc..

4. How does Foreign
Exchange
impact your business?
 Doing business outside your home country creates exposure to currency movements even
if you only do business in USD.
 Doing business inside your home country also has foreign currency implications .
 Global business, regardless of geographic borders, therefore generates exposure to
currency swings.
 Unless all exposure is understood and quantified, management decisions put your
company at risk for not only margin and profit disruptions, but for share price ramifications
as well.
Many companies have
some type of direct or
indirect FX exposure.
 Competition against foreign companies.
 Import or source products from vendors or suppliers in foreign countries.
 Export or sell products to clients or distributors in foreign countries.
 Have bank accounts in various currencies.
 Are owned by a foreign parent company.
 Are acquiring or divesting businesses, plants or companies located overseas.
 Report foreign exchange translation gains or losses on financial statements.
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5. “What we anticipate seldom occurs; what we least
expect generally happens”
Benjamin Disraeli,
Prime Minister of the United Kingdom
(1868, 1874-1880)
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6. 1.25
1.30
1.35
1.40
1.45
1.50
Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16
USD/CAD: last 12-months
Lo: 1.2461
Trading Ranges:
 Last 12-months
= 2229 pips (1.4690 – 1.2461)
= 15% movement
 Annual Average over last 5-years
= 1450 pips
= 13% movement
 Monthly Average over last 5-years
= 415 pips
= 4% movement
 Brexit outcome (June 24th)
= 385 pips (1.3099 – 1.2714)
= 3% swing in ONE DAY!
Hi: 1.4690
FX Volatility is the new Norm (CAD)
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7. -
2,000
4,000
6,000
8,000
10,000
12,000
 Margin erosion
 Uncertain cash flows
 Loss of Shareholder value
 Missed budget rate
 Loss of competitive advantage
CAN YOUR BUSINESS
AFFORD TO BE EXPOSED TO
SUCH POTENTIAL MONTHLY
SWINGS, LINKED TO
FOREIGN EXCHANGE
EXPOSURES?
 The above chart shows the change in $ value vs CAD100,000,
calculated using each month’s trading range over the last 5-years.
 For example, June 2016 (Brexit) the range of 1.3099 – 1.2714 (385 pips)
is equivalent to $2,300 or 3% change in value for CAD100,000
 Monthly change in $ and % value over last 5-years
Largest = $10,386 (10%)
Smallest = $1,620 (2%)
Average = $3,920 (4%) MONTHLY potential risk to
your business per CAD100,000 exposure
FX Volatility = Risk to your business
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8. 1.05
1.10
1.15
Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16
EUR/USD: last 12-months
Lo: 1.0524
Trading Ranges:
 Last 12-months
= 1092 pips (1.1616 – 1.0524)
= 9% movement
 Annual Average over last 5-years
= 1520 pips
= 13% movement
 Monthly Average over last 5-years
= 496 pips
= 4% movement
 Brexit outcome (June 24th)
= 515 pips (1.1428 – 1.0913)
= 5% swing in ONE DAY!
Hi: 1.1616
June 23rd : BREXIT
FX Volatility is the new Norm (EUR)
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9. 1.15
1.20
1.25
1.30
1.35
1.40
1.45
1.50
1.55
Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16
GBP/USD: last 12-months
Lo: 1.1841
Trading Ranges:
 Last 12-months
= 3668 pips (1.5509 – 1.1841)
= 24% movement
 Annual Average over last 5-years
= 1760 pips
= 14% movement
 Monthly Average over last 5-years
=560 pips
= 4% movement
 Brexit outcome (June 24th)
= 1789 pips (1.5018 – 1.3229)
= 12% swing in ONE DAY!
 ‘Flash Crash” (October 7th)
= 775 pips (1.2616 – 1.1841)
= 6% swing in a few minutes!
Lo: 1.5509
June 23rd : BREXIT
October 7th :
“Flash Crash”
FX Volatility is the new Norm (GBP)
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10. 16.00
16.50
17.00
17.50
18.00
18.50
19.00
19.50
20.00
Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16
USD/MXN: last 12-months
Lo: 16.3253
Trading Ranges:
 Last 12-months
= 36,080 pips (19.9333 – 16.3253)
= 18% movement
 Annual Average over last 5-years
= 24,079 pips
= 14% movement
 Monthly Average over last 5-years
= 7,530 pips
= 5% movement
Hi: 19.9333
FX Volatility is the new Norm (MXN)
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11. 11
2. Economic
Risk
3. Transactional
Risk
1. Translation
Risk
1. Translation of foreign currency denominated
assets / liabilities into your financial
statements.
3. Transactions denominated in a foreign
currency are settled at a different exchange
rate than initially recorded or budgeted.
There is also risk in the price provided by the
bank.
2. Competitive advantages and / or
disadvantages resulting from exchange rate
fluctuations.
Firm Value
Types of Foreign Exchange Risk

12. Understand the
factors which will
influence any
HEDGING
DECISION
 What is the underlying exposure?
 Are the forecasts reliable?
 Is there complete visibility of the exposures?
 Have the exposures (or any future changes) been communicated accurately across
business units?
 Will you be measured against any Key Performance Indicators (KPIs) which will drive any
hedging decision:
 Budget Rates
 PBT or EBITDA
 P&L Volatility
 Financial Covenants
 Is Senior Management involved in understanding the exposures and aware of current
approach?
 What are the company’s objectives by hedging? ( e.g. – minimize Income Statement
Volatility, achieve Budget Rate or maintain competitive with peers etc.)
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13. Implementing
your HEDGING
STRATEGY
Once exposures have been identified and also the company’s objectives are understood, if the
decision has been made to hedge any foreign currency exposure, there are a number of
Hedging Strategies available:
 Rolling Hedge
Exposures are hedged frequently such as each month or quarter usually for the full
amount, extending the tenor and replacing the maturing hedge.
 Layering Hedge
Exposures are hedged frequently such as each month or quarter at varying ratios. The
near months are hedged at a higher ratio compared to farther tenors, which are
“layered in” over time.
 Periodic Hedging
Exposures are usually hedged in one-off trades for a number of tenors. These are often
hedges for the new financial year to match the budget rate of a company.
 One-off Hedges
These are usually driven by corporate events such as acquisitions or dividends and do
not relate to ongoing business exposures.
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14. 14
FX Products to use in a HEDGING STRATEGY
 Locks in a price today for a payment due on
a future date or range of dates, providing a
hedge against currency fluctuation
 Forward prices are determined by an adjustment
made to the spot price based on the interest rate
differential between the two currencies
 For immediate payment in one currency in
exchange for another, usually to send foreign
currency payables or convert foreign receivables
(simple wire transactions or payments)
 Typical market settlement in two business
days but can be done same day depending
on currency and time of the transaction
 To hedge foreign currency risk in emerging
markets where no traditional forward market
exists, e.g., China and Brazil
 NDFs are synthetic hedges that are net
settled in USD at the maturity of the contract
and ‘no delivery’ of the forex occurs
 Simultaneous buying and selling of the same
currency for one date against another future
date. For example, if a company has a Euro
receivable in 3 months but a Euro payable
in 6 months
 A swap allows for guaranteed upfront exchange
rates on both dates for both transactions
FORWARD
CONTRACTS
CURRENCY
OPTIONS
NON-
DELIVERABLE
FORWARDS
CURRENCY
SWAPS
Foreign Exchange is an “Over-the-Counter”(OTC) market, using private negotiations for contracts.
SPOT
CONTRACTS

15. Case Study 1:
Sourcing in Non USD
Denominated Currency
• ABC company based in the U.S agrees to purchase (import) a new manufacturing machine
from Germany. The price of the product is EUR1,000,000and payment is due in 1 month.
• The company has no EUR revenue and will be required to sell USD / buy EUR1,000,000
• Today’s Exchange Rate = 1.1000 | Import today would cost USD1,100,000
 Failure to recognize foreign exchange rate risk or deciding to “let it ride” can be costly.
 To reduce cash flow volatility, companies need to remove the potential swings in FX Gains
or Losses
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Strategy
In 1-months time, if
EUR/USD is trading at:
Cost of Import
Payable
relative to
Hedge
1.15
1.10
1.05
1.15 (EUR appreciates) $1,150,000 $50,000
1.10 $1,100,000 $0
1.05 (EUR depreciates) $1,050,000 ($50,000)
2. Remain unhedged: Purchase
EUR in 1-months time at
Prevailing EUR/USD spot rate
1. Hedge the exposure: Enter
into a Forward Contract at 1.10
Fixed at
$1,100,000

16. Case Study 2:
Implementing a Rolling Hedge Program
impact your business?
 ABC Co. sources product from a Canadian manufacturer and it is
the company’s policy to manage their exposure and therefore
forecast their USD cost going forward.
 Strategy: ABC Co. will enter into a rolling hedge program via
forward contracts, to lock in a portion of their Canadian
payables. The approach has the company hedged with a larger
percentage of the exposure on the front end or near value dates
and tiered to a lesser percentage at the far end of the value
dates. It is ABC Co’s goal to always have hedges out 1 year.
 Execution: Upon entering into the rolling hedge program, ABC
Co. locks into forward contracts in the following manner: 80% of
forecasted exposure for first 3 months, 60% for following 3
months, 40% and 20%. This provides a net hedge of 50% of the
company’s annual exposure. ABC Co. also adds additional
forward hedges at this time so as to always be hedge at 50% and
out 1 year.
 Outcome:The rolling hedge program allows ABC to have a
baseline USD cost that is known while permitting them to
participate in the market.
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CAD0
CAD50,000
CAD100,000
CAD150,000
CAD200,000
CAD250,000
CAD300,000
CAD350,000
CAD400,000
CAD450,000
Aug '16 Sep '16 Oct '16 Nov'16 Dec "16 Jan'17 Feb '17 Mar"17 Apr'17 May'17 Jun'17 Jul '17
NewLayer
InitialHedge
80%
60%
40%
20%

17. Background to Opus Bank
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••
The name Opus Bank was derived from the original definition of "opus“ which meant: a life’s work. Opus Bank was built and designed
to honor the life's work of our clients.
WHAT IS OPUS BANK?
•Opus Bank is a commercial bank founded on September 30,201o in Irvine, California.
•Opus listens to it's clients' plans for growth and then brings the tools, resources, and bankers to help them grow as well as to advice
and counsel their clients on everything from financial analysis and modeling to mergers and acquisitions.
WHAT IS OPUS BANK'S MISSION?
•The mission of Opus Bank is to accelerate the vision of successful entrepreneurs and business leaders who have proven their ability
and need to partner for growth.
•Opus is more than a bank, more than making loans, more than generating deposits.
WHAT MAKES OPUS DIFFERENT?
•Opus Bank listens to their client's plans for growth, and then brings the bankers, resources, and plans to enable their clients' vision.
•At Opus Bank, clients are placed at the center of the table and the full force of the bank is engaged to enable the client to succeed.
KEY FACTS ABOUT OPUS BANK
•Among the fastest growing banks in the Western region1
•Over 55 offices in Arizona, California, Oregon, and Washington.
•With $7.5 billion in assets, Opus Bank ranks among the top 165 banks of the approximately 5,645 banks in the nation.
•The Opus Community Foundation is providing financial support to nonprofit organizations that make a positive and meaningful
difference in our community.

18. FIRM OVERVIEW  Boutique capital markets firm specializing in foreign exchange payments, hedge advisory, and trading
 Launched in 2009 by experienced bankers to provide customized, cost-effective foreign exchange transactions
EXPERIENCED MANAGEMENT  Management team with over 250 years of combined capital markets experience at top-tier banks
 Advisory board of recognized industry leaders in the fields of investments and trading, securities law,
software development, and consulting
CLIENT BASE  Commercial companies of all sizes doing business abroad
 Private equity or other investment funds with foreign currency exposure within their portfolio of companies
 Asset management companies, pension funds, and endowments with an international mandate
 Small and mid-cap banking institutions, generally under $10 billion in assets.
 Small and mid-cap investment banking firms that provide capital to their clients
CUSTOMIZED SOLUTIONS  Review and advisory of current and projected needs to determine most cost-efficient instruments and timing
 Transparent and pre-committed pricing
 Historical forensic analysis to quantify impact to bottom line
COMPETITIVE EDGE  World-class experience and infrastructure at the service of every client
 Secure transactions cleared through multi-national counterparties
 On-boarding requires no change to client’s current banking account structure
 Institutional regulatory and compliance regime
 User-friendly, client-facing trading portal, with live pricing in all time zones
Background to Bannockburn Global Forex, LLC
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19. Questions?
Contact Us For More Information:
Miguel Serricchio
Opus Bank
Senior Managing Director
949-249-8251 office
949-554-9174 cell
mserricchio@opusbank.com
Michael Bourke
Bannockburn Global Forex, LLC
Managing Partner
323-250-4001 office
718-913-6576 cell
Michael.Bourke@bbgfx.com
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