Weather Derivatives

FS Energy, LLC, a leading interdealer broker and a subsidiary of Compagnie Financiere Tradition, today announced its US and Australia-based weather derivatives division completed the first-ever auction in Asia on behalf of a client who was looking to diversify its weather exposure and to help build liquidity in Japan. Offers were solicited for cumulative average temperature futures and calls in Japan for the May - September 2008 time period for the cities of Tokyo and Osaka. The auction was fully placed and was over subscribed in terms of the capacity that was available in the market. Offers interested in participating in the auction had to submit formal proposals to TFS Energy by 12 noon (Eastern Standard Time) on March 27, 2008. The auction followed the very successful Dutch auction format, which has been repeatedly used by TFS Energy clients throughout the world.

"We are very pleased with the notional value of $11.25 million for the first-ever auction in Japan. Closing this auction signals the benefits of the auction format especially in areas of the world that do not have a highly liquid weather market. From the interest that we saw in this auction and the amount of business that traded bilaterally immediately following the auction, it is fair to say that we tapped into the growth potential that we have seen all along in Asia," commented Kendall Johnson, MD and Global Head of Weather Derivatives for TFS Energy. "This will be the first of many more transactions to come."

TFS Energy has hosted numerous auctions ranging in magnitude from $1 million to upwards of $60 million of transferred risk. This auction comes after TFS Energy's largest-ever Dutch auction on behalf of UBS, where the notional value was in excess of $64 million. Its weather desks are located in Stamford, London, and Sydney.