FEA Launches New Version of @ENERGY Product Suite
Featuring Extensive Model Coverage
New valuation tools helps companies comply with Sarbanes-Oxley legislation
HOUSTON, Texas -- Trading and Risk: Profit and Protection -- Sept. 4, 2003 - Financial Engineering Associates, Inc. (FEA), a wholly-owned subsidiary of Barra, Inc. (Nasdaq: BARZ), and a leading developer of derivative pricing and risk management technologies for the energy and commodities industries, today announced a new version of the @ENERGY® 4.0 product suite that includes six independent modules. Key feature updates have been made to these modules: @ENERGY 4.0 provides new model and instrument coverage in @ENERGY/Basics and @ENERGY/Advanced modules; new time-saving calibration routines in @ENERGY/Forward Curve module; and, usability enhancements to all of the @ENERGY spreadsheets.
Using FEA @ENERGY, energy companies can instantiate best practices in energy risk management. Traditionally, companies often use proprietary, or even different, models to value energy derivatives for financial reporting - often resulting in incongruent valuations. With passage of the Sarbanes-Oxley Act of 2002, publicly traded companies are required to provide enhanced disclosures regarding their corporation's financial filings. Using FEA, energy companies can more accurately and fairly price derivatives, helping them comply with this new legislative mandate. FEA affords companies direct access to independent, thoroughly tested, and fully auditable valuation tools that offer detailed and accurate analytics.
"Software users in the energy industry require tools that offer both broader instrument coverage and a higher level of sophistication," said David Franklin, head of trading and risk management at SSE Energy Supply. "FEA's @ENERGY suite provides flexible solutions to a range of problems in our business - from pricing simple options, to optimizing gas storage and power plant operation."
Eighteen of the top 20 U.S. energy firms have already adopted @ENERGY, making it the de facto industry standard for energy traders and risk managers in the U.S. and worldwide. FEA's @ENERGY software gives utilities, traders and marketers of energy-related assets the advanced tools they need to price intricate energy and power transactions; to engineer protective hedging strategies; and to manage the risks inherent in complex commodity and derivative portfolios. With version 4.0 of the @ENERGY suite, FEA delivers its most advanced set of energy pricing, market modeling and financial forecasting tools to date.
"Under Section 302 of the Sarbanes-Oxley Act, executives are now held personally liable for financial statement certification," said David Soronow, vice president of product management. "FEA's @ENERGY software tools form a comprehensive, coherent, and thoroughly documented set of derivative pricing and asset valuation analytics. As the most widely-used and accepted valuation tool in the industry, @ENERGY provides industry executives with the comfort level they require to certify financial statement mark-to-market values with confidence."
The new model coverage includes:
New Regime-Switching Jump-Diffusion Model (RSJD)
- FEA's new regime-switching jump diffusion model was specifically designed to capture price spikes in power markets.
- The RSJD model is now available in several instruments pricing functions including European options, average price options and average strike options, spread options, spread average price options, calendar spread options, best-of options, crack options and crack average price options.
FEA's Multi-Factor Seasonal PCA Model
- FEA's Multi-factor seasonal principal component analysis model is now available for pricing index swaptions in @ENERGY/Basic. This is the same model that gained industry acceptance in @ENERGY/Storage for modeling the natural gas forward price curve.
@ENERGY is now even easier to use
@ENERGY 4.0 provides new model and instrument coverage in @ENERGY/Basics @ENERGY/Advanced, new time-saving calibration routines in @ENERGY/Forward Curve, and usability enhancements to the majority of the @ENERGY spreadsheet templates used throughout the six modules of the suite. The @ENERGY spreadsheets have new drop down menus, which improve overall usability.
Availability
@ENERGY 4.0 is available today through FEA. For more information, visit www.fea.com or call 1+ (510) 549-8702. Come visit FEA at the Trading and Risk: Profit and Protection conference in Houston, Texas on Sept. 4, 2003, on the lower level of the show floor.
About @ENERGY
@ENERGY is a front office derivative pricing and risk management tool designed to support trading activities for physical and financial power, natural gas, crude oil, and petroleum. @ENERGY is a set of Microsoft® Excel add-in functions that values derivative instruments used in the power, natural gas, oil, coal, metal, and soft commodity industries. Typical users include traders, risk managers, gas and power marketers, utilities, industrial firms, brokers, and auditors.
About FEA
Focusing on the energy, financial, and commodities markets since 1989, Financial Engineering Associates, Inc., a wholly owned subsidiary of Barra, Inc., is renowned for the development of option valuation models and market risk assessment software. Powered by constant innovation, aggressive release schedules, and superb technical support, FEA is routinely first-to-market with pricing models and authoritative risk management tools for the latest, most complex financial instruments. FEA is used at more than 700 sites by institutional clients that include: energy firms, money center banks, Fortune 500 companies, trading enterprises, and leading financial firms worldwide. FEA remains at the forefront of financial engineering through an ongoing commitment to meeting the needs of its clients worldwide. For more information, please visit www.fea.com.
@ENERGY is a registered trademark of Financial Engineering Associates, Inc.
